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1 Great Reason to Claim Social Security Benefits as Early as You Can

By Katie Brockman – Dec 14, 2019 at 2:46PM

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Claiming early might be the best retirement decision you'll ever make.

One of the biggest decisions you'll face when it comes to Social Security is the age you should begin claiming benefits.

The earliest you can start claiming is age 62, but you'll receive a reduction in benefits for every month you claim before you reach your full retirement age (FRA), which is either age 66, 66 and a few months, or 67, depending on the year you were born. If you wait until after your FRA to claim (up until age 70), you'll receive a boost to your full benefit amount. 

Because you'll receive fatter checks by delaying benefits by a few years, some experts advise waiting until age 70 to maximize your benefits. Although in some cases that may be the best decision, there's a really good reason for claiming as early as you can.

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Claim benefits early to improve your quality of life

Your decision about when to claim benefits shouldn't be based purely on finances; it should also be based on your overall quality of life.

You don't necessarily have to retire and claim benefits at the same time, but if you retire in your early 60s and want to delay benefits until age 70, you'll need to have a robust enough retirement fund that you can survive on your savings alone for several years. That's why many people choose to start claiming benefits when they retire, because those monthly checks can make it easier to afford a more comfortable retirement lifestyle.

Sometimes claiming benefits sooner rather than later is a good idea because it allows you to enjoy retirement when you're relatively young and healthy. This is especially true if you have big plans to travel or pick up new hobbies that require you to be relatively active, like hiking, biking, or even chasing after the grandkids in the backyard. If you wait until age 70 to retire and claim benefits, you won't have as much time to live an active retirement lifestyle.

Those who aren't in the best health are especially good candidates for claiming benefits early, because that will give you more time to enjoy your money. Time is your most valuable asset, and if you wait too long to claim benefits and your health starts to decline, you'll likely regret not making the most of your 60s when you had the chance.

How to decide whether you can afford to claim early

Although the age you begin claiming is about more than just finances, there is a financial component to deciding when you should file for benefits. If you have next to nothing saved for retirement and you decide to claim as early as you can, your monthly checks may not be enough to cover all your expenses. If that's the case, you risk spending your golden years pinching pennies just to make ends meet.

Before you decide when you'll claim, check your Social Security statements online by creating a mySocialSecurity account. Your statements will give you an estimate of what you can expect to receive in benefits based on your real earnings. Keep in mind that this estimate assumes you'll be filing for benefits at your FRA, so if you decide to claim earlier or later than that, it will affect your monthly checks.

The next step is to calculate just how much your benefits will be affected depending on when you claim. For example, say your FRA is 67, and if you claim at that age, you'll receive $1,600 per month. If you claim at age 62, your benefits will be reduced by 30%, leaving you with $1,120 per month. And if you were to wait until age 70 to claim, you'd receive an extra 24%, for a total of $1,984 per month.

From there, you can gauge whether claiming early is feasible. If you have a healthy retirement fund and the $1,120 you'd receive by claiming at 62 is enough to help you pay all your bills, then claiming early might be the best decision. But if the extra money you'd get by waiting until your FRA or beyond to claim would completely transform your retirement (and you're healthy enough to wait to claim), you might be better off delaying benefits.

No matter when you choose to claim benefits, make sure you have a strategy behind your decision. Sometimes waiting is the best choice so you can receive bigger checks, but oftentimes you're better off claiming as early as you can so you can make the most of your golden years.

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