Your Social Security benefits are based on your earnings during your top 35 working years. Once your full monthly benefit is calculated, you'll be eligible to collect it upon reaching full retirement age (FRA). That age is a function of your year of birth, and it's either 66, 67, or 66 and a certain number of months. However, you don't have to wait until FRA to file for Social Security. In fact, you can start taking benefits as early as 62. Here are a few things you should know, though, if you're going to go that route.

1. You'll reduce your monthly payments -- and quite possibly for life

The upside of filing for Social Security as early as possible is that doing so gives you access to your benefits immediately. The downside, however, is that filing at 62 means reducing the amount you collect in Social Security each month, and quite possibly for life. Your benefits will take a 6.67% hit each year for the first three years you file ahead of FRA, and a 5% hit for each year thereafter. This means that if your FRA is 67 and you file at 62, you'll only end up collecting 70% of your full monthly benefit month after month.

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Furthermore, your benefits won't automatically get restored to their full amount once you reach FRA. That's just not how the program works. Therefore, if you're going to file at 62, prepare to collect that lower amount each month for the rest of your life.

2. You can change your mind without being penalized

While filing for Social Security at 62 could lower your benefits for life, it doesn't have to. That's because you're allowed one do-over if you change your mind and come to realize you filed too early. If that happens, you can withdraw your application for benefits within a year and return all of the benefit payments you received to the Social Security Administration. Once you do, you'll get to start over with a clean slate and file at a later point in time, thereby avoiding a permanent reduction in benefits.

Let's say you file for Social Security at 62 because you lose your job and need the money. If you find work again within a year and are able to repay all of the benefits you received, you can return that money, withdraw your application, and wait until FRA (or another age) to initiate a new claim. In this regard, Social Security can serve as a loan of sorts. Just be careful, though, because you only have a limited window to undo your application and pay back your benefits in time.

3. It's not necessarily an unwise move

You'll often hear that claiming Social Security at 62 is a mistake because doing so results in an automatic reduction in benefits. But there are some scenarios where it pays to file that early, even if you have no intention of undoing your application later on.

One such instance is if you lose your job, fall ill, or encounter some other situation where you need money and can't pay your bills without racking up debt. If that's the case, then you're better off taking a hit on your monthly benefits than facing a boatload of interest charges.

Another good reason to claim benefits at 62 is if your health is notably poor. One lesser-known fact about Social Security is that it's technically designed to pay you the same total lifetime benefit regardless of when you initially file. The logic is that while filing early will reduce your benefits each month, you'll also collect a greater number of payments to make up for that fact. This formula, however, assumes that you'll live an average life expectancy. If you think you won't, then it generally pays to file as early as you can.

Finally, if you have enough savings or other income to pay your bills in retirement without Social Security, then you might as well claim those benefits at 62 if doing so allows you to travel and pursue hobbies at a younger age. Remember, retirement is a great opportunity to do the things you've always wanted to, and the younger you are, the more energy you're apt to have to enjoy them fully.

If you're going to file for Social Security at 62, make sure you understand the ramifications of doing so. At the same time, recognize that claiming benefits at 62 isn't always such a terrible idea. It could, in fact, end up being a great decision that serves you well in the long run.

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