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Sorry to Say: You Probably Shouldn't Claim Social Security at 62

By Maurie Backman – Sep 20, 2021 at 7:02AM

Key Points

  • Age 62 is the most popular age to sign up for Social Security.
  • In many cases, claiming benefits that early will end up being a mistake.

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Think you'll file for benefits as soon as you're allowed to? You may want to hold off for one very big reason.

There's a reason so many seniors rush to file for Social Security at 62 -- it's the earliest age to sign up for benefits. If you're planning to go a similar route, you may be counting down the days till your 62nd birthday. But here's why you may want to rethink your plan.

Can you afford a financial hit for life?

If you've saved very well for retirement, to the point where Social Security will only constitute a small portion of your senior income, then frankly, it may not matter when you file for benefits. After all, if your savings can provide, say, $5,000 a month of income, then you may not care if Social Security pays you a few hundred dollars less.

Social Security cards

Image source: Getty Images.

But if you expect Social Security to be your primary income source, then filing for benefits at 62 is move you might sorely regret. You're not entitled to your full monthly Social Security benefit until you reach full retirement age, which is either 66, 67, or somewhere in between. If you claim benefits at 62, you'll reduce them by up to 30% -- for life.

Now the upside of claiming benefits at 62 is that you'll get your money sooner, and if you don't expect to live a long life (say, you have many health issues going into retirement), then filing at 62 is a smart move. But if you expect to enjoy an average retirement, or a longer one, then cutting your primary income stream could prove disastrous.

How much of a hit will your senior income take if you file at 62?

These days, the average Social Security recipient collects $1,557 a month. If your full retirement age is 67 and that's the benefit you're entitled to, filing at 62 will leave you with $1,090 a month instead. If you have no income outside of Social Security, that's not a lot to live on.

But even if you do have outside income, you never know how much your living expenses might rise in retirement. Healthcare could cost you a bundle, especially if medical problems develop as you age. You could end up needing a host of home repairs as your house gets older. Or, you might need extra money just to keep busy in the absence of having a job.

Filing for Social Security at 62 means slashing a key income source. And unless you're confident you can make up for that hit another way, you may be better off waiting to claim your benefits.

Of course, that doesn't have to mean filing at FRA. You can sign up for benefits at 64 or 65 as a compromise. That way, your benefits will be reduced, but not to the same degree you'd face by signing up for Social Security as early as possible.

If you're looking at a $1,557 benefit at age 67, signing up at 65 will leave you with about $1,350 a month rather than just $1,090. And chances are, that extra money will come in more than handy at one point or another during your senior years.

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