Please ensure Javascript is enabled for purposes of website accessibility

You'd Be Wise to Claim Social Security at 62 if These Reasons Apply to You

By Maurie Backman - Mar 22, 2021 at 5:36AM

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'll often hear that signing up for benefits at 62 is a poor choice. Here's when it isn't.

If you earn enough work credits in your lifetime to be eligible for Social Security, you can sign up for benefits as early as age 62. Doing so will mean slashing those benefits on a permanent basis. It'll also mean getting your money a lot sooner than if you were to wait until full retirement age (FRA), which is the age at which you can collect your monthly benefit without any sort of reduction.

Now you'll often hear that filing for Social Security at 62 is a move you'll end up regretting -- namely, because it'll mean locking in a lower monthly benefit for life. But if any of these scenarios apply to you, claiming benefits at 62 could actually end up being a very smart move.

Older man at laptop holding phone to ear with dog on lap

Image source: Getty Images.

1. You're worried you won't live a long life

Social Security is technically designed to pay you the same lifetime benefit, whether you file as early as possible or you wait until FRA. The logic is that filing early will cut your benefits, but you'll collect benefits a few extra years. Waiting, meanwhile, will give you fewer years of benefits, but higher payments on a monthly basis.

You should break even if you live an average lifespan. But what if you don't? If you have reason to believe you'll pass away at a relatively young age, then it actually pays to sign up for benefits as early as possible, because while doing so will mean getting a lower monthly paycheck, it could also mean securing a higher lifetime payout.

2. You need to escape a bad job situation

Unfortunately, some people's jobs end up being bad for their health. If your work causes you a world of stress, or your physical working conditions put you at risk for medical problems, then filing for benefits at 62 could be your ticket out of a bad job situation. From there, you may have the flexibility to find a better job, or transition to a part-time job you can do more independently.

3. You have plenty of savings to fall back on

Many seniors inevitably wind up counting on Social Security to pay their basic living expenses. But what if you have more than enough money in retirement savings to cover things like housing, transportation, utilities, healthcare, and food? If the money you've socked away in your nest egg is enough to get you through your senior years without worry, then you may not need to wait until FRA to claim Social Security. And if that's the case, signing up much earlier might allow you to better enjoy the first part of your 60s. You can use your benefits to travel, pursue hobbies, or even start a business that's fulfilling to own.

The downside of claiming Social Security at the earliest possible age of 62 is pretty clear -- you'll guarantee yourself less monthly income for the rest of your life. When you think about it that way, that's a pretty daunting notion. On the other hand, filing for benefits at 62 could actually end up working out better for you financially, and even if it doesn't -- meaning, you wind up living longer than expected and losing out on a bit of lifetime income -- it could still afford you an opportunity to free yourself from a terrible job and spend your early 60s doing the things you've always dreamed of.

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 service.

Stock Advisor Returns
330%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/22/2022.

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.