You can claim Social Security as early as 62, but by starting right away, you're resigning yourself to smaller monthly checks for the rest of your life. Every month that you delay benefits past 62 will increase your benefit checks until you reach 70 when you're entitled to the largest possible benefit. You'll get fewer checks if you wait to start benefits, but you could end up getting more money over your lifetime if you live long enough.
Yet despite the allure of larger benefits in a few years, thousands of seniors every year choose to sign up almost as soon as they've finished blowing out their 62nd birthday candles. Why? People have their own reasons, but here are a few of the most common ones.
You don't expect to live long
Delaying Social Security only makes sense if you believe you'll live a long life, at least into your mid-80s or beyond. If you know you have a health condition that will shorten your life, delaying benefits just doesn't make sense. You might as well start early and claim as much money as you're able to.
It's hard to be sure how long you'll live with a serious health condition, but if you fear you may only live for a decade or less after turning 62, you might as well start claiming benefits right away. You'll probably get more money overall this way than if you'd waited and accepted larger checks for a shorter time frame.
You're forced to retire earlier than you planned
Retirement isn't always a choice. Some people lose their jobs or get sick or severely injured, leaving them unable to work. Others have close family members who become sick or injured and they're forced to step away from their jobs in order to care for them. In these cases, Social Security can mean the difference between being able to pay your bills or sinking into debt, so it makes sense to start it early, even if you might get less money overall.
If you don't want to risk potentially short-changing yourself on Social Security benefits, explore other alternatives before claiming Social Security to make ends meet. You might be able to transition to part-time work or find a more flexible job that enables you to work from home. You could also seek out additional sources of revenue, like renting out properties or spare rooms to get passive income coming in. These strategies might enable you to delay claiming Social Security until later when you can get larger checks.
The future is uncertain
There are a lot of questions, both about Social Security and our own lives, that we can't answer yet. We don't know how long we're going to live or what health crises might arise in the future. And we don't know yet what changes the government will make to Social Security to keep it sustainable for generations to come. There's a risk to starting benefits early, but there's also a risk to waiting, so some people prefer to take the smaller amount now rather than take a gamble on the larger amount later.
One thing we do know is that Social Security is not going to disappear, at least in our lifetimes. While its trust funds are slated to be depleted by 2035, it would still be able to pay out 80% of scheduled benefits until 2090 even if the government made no changes at all. But some of its proposed changes, including reducing cost-of-living adjustments (COLAs) and reducing benefits, could mean that your benefits might not go as far in the future as they do today. Starting early might mean getting less money overall, but at least you know what you're getting -- whereas if you wait and the government makes a bunch of changes to the program, you could end up with less.
We all want to make smart choices about Social Security since it's such a big part of most people's retirement plans. Starting at 62 can be a smart choice in some circumstances, but it's important that you think through the decision carefully, explore all of your other options, and understand why you're making the choice, rather than just blindly signing up at 62.