Please ensure Javascript is enabled for purposes of website accessibility

3 Reasons It's Dumb to Take Social Security Benefits at 62

By Selena Maranjian - Feb 1, 2020 at 11:05AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

You can start collecting your Social Security benefits as early as age 62 -- but there are some good reasons not to.

Social Security is or will be a vital source of retirement income for the vast majority of Americans. Indeed, it makes up 90% or more of the income for a fifth of married elderly Social Security recipients and for close to half of unmarried ones.

Thus, it's rather critical to get familiar with the program and to know enough to make smart Social Security decisions, such as when you will start collecting benefits. You can do so as early as age 62, but it's not always smart to do so -- here are three reasons why.

A close-up photo of an older man's face, and he looks annoyed.

Image source: Getty Images.

No. 1: You can collect more by delaying

A key reason not to start collecting at age 62 is that your checks will grow bigger the longer you put off starting, until age 70. For every year beyond your full retirement age (that's 66 or 67 for most of us) that you delay starting to collect, your benefit check will swell by about 8%. So delaying from age 67 to age 70 will inflate those checks by about 24%. Meanwhile, collecting early shrinks those checks, by as much as 30% if your full retirement age is 67 and you start collecting at 62. That's not quite as bad as it seems, though, because while the checks will be smaller, you'll collect many more of them.

Here's a quick look at how your benefits change depending on when you start collecting -- if you were born in 1960 or later and therefore have a full retirement age of 67:

If you start collecting Social Security at

Your benefits will be

Age 62

Reduced by about 30%

Age 63

Reduced by about 25%

Age 64

Reduced by about 20%

Age 65

Reduced by about 13.3%

Age 66

Reduced by about 6.7%

Age 67

Unchanged

Age 68

Increased by about 8%

Age 69

Increased by about 16%

Age 70

Increased by about 24%

Source: SSA.gov.

No. 2: You might live a long time

While it's true that starting early gets you smaller checks but many more of them, it still won't be worth starting early unless you live an average-length life or a shorter one. The system was designed to be a wash no matter when you start collecting, for those with average-length lives.

But your family might feature lots of 90-something elders, and your health might be excellent. If so, delaying as long as possible, up to age 70, can be a smart move. Your checks will be maximized and you'll collect quite a few of them due to what should be a long life.

The Social Security Administration itself has noted that, "About one out of every three 65-year-olds today will live past age 90, and about one out of seven will live past age 95."

No. 3: Your spouse might benefit if you wait

Here's another reason to not start collecting early: Your spouse might benefit if you delay. This is very much the case if your earning history is much stronger than his or hers. Why? Well, understand that when one of you dies, the survivor gets to collect either Social Security benefit -- their own or their late spouse's -- whichever is larger. If the higher-earning spouse delays collecting benefits as long as possible, ideally until age 70, then their benefits will be maximized, and whichever spouse survives will get to collect as much income as possible from the program.

It's worth learning more about how your marriage might factor into your Social Security decisions.

The more you know about Social Security, the more you can get out of it. Don't leave valuable retirement income on the table.

The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
394%
 
S&P 500 Returns
127%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.