Please ensure Javascript is enabled for purposes of website accessibility

3 Reasons to Claim Social Security Early

By Katie Brockman - Apr 11, 2020 at 5:45AM

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

In some situations, claiming early may be the best Social Security decision you can make.

One of the most pressing questions plaguing soon-to-be retirees is when to start claiming Social Security benefits. In fact, nearly half of U.S. adults age 45 and older say deciding when to file for benefits is their biggest question about retirement, according to a survey from Empower Institute.

Choosing when to claim is a huge decision, because it will affect how much you receive each month for the rest of your life. If you claim at your full retirement age (FRA) -- which is age 67 for those born in 1960 or later, or either 66 or 66 and a few months for those born before 1960 -- you'll receive the full benefit amount you're theoretically entitled to. You can claim earlier than that, but your benefits will be reduced by up to 30% if you have a FRA of 67 and claim as early as possible at age 62.

Although you'll receive smaller checks by claiming earlier than your FRA, in some scenarios it might be your best choice. There are three reasons why claiming early might be in your best interest.

Couple sitting in chairs next to each other on the beach

Image source: Getty Images

1. You might receive more money over a lifetime

In theory, the total amount you receive in benefits over a lifetime should be roughly equal if you live an average life expectancy, which is approximately 85 years, according to the Social Security Administration. You'll either receive smaller checks but more of them, or you'll get fewer, bigger checks.

However, if you have reason to believe you'll live a shorter-than-average lifespan, claiming early might mean you'll receive more money over your lifetime than if you were to hold off on filing for benefits.

Of course, nobody can predict exactly how long they'll live in retirement. But if you're battling health issues or have a family history of certain diseases or illnesses, it might be worth considering claiming sooner rather than later. If you delay benefits and then realize you don't have as much time as you thought to enjoy that money, you could regret not claiming earlier.

2. You can start enjoying retirement sooner

If you have a solid retirement fund, you may not need the extra cash you'd receive each month by delaying benefits. In that case, you might want to claim benefits early and get a jump start on your retirement.

Keep in mind that you don't necessarily need to retire and claim benefits at the same time. So if you wanted to retire in your early 60s and then wait a few years to file for benefits so you can earn those bigger checks, you can do that. But if you have big plans for retirement, claiming early can provide you with a little extra cash sooner so you can better enjoy those early years when you're still relatively young and healthy.

3. You can create a claiming strategy with your spouse

If you and your spouse are both eligible to collect Social Security benefits, it's wise to have a strategy in place for how each of your monthly checks will affect your retirement.

For example, if your spouse earns significantly more than you and is entitled to more money in benefits, it may be smart for you to claim early and for your spouse to delay benefits. That way you two can enjoy some extra cash now with your benefits, but you'll also be able to rely on bigger checks down the road if your spouse waits to claim.

Claiming benefits early isn't the right decision for everyone, but for some people it can make retirement much more enjoyable. If you've done your homework and considered all your options, claiming early may be one of the best retirement decisions you'll ever make.

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
316%
 
S&P 500 Returns
112%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 07/03/2022.

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.