The age at which you begin claiming Social Security is an important decision, as it will determine how much you receive in benefits each month. The earliest you can claim is 62, but you can also delay benefits and begin claiming anytime thereafter.
While the age you file for benefits is a personal decision that will depend on your unique situation, in some cases, there are significant advantages to claiming at a particular age.
Filing for Social Security at 62 may be appealing to many retirees, but there are a few reasons you might regret that decision.
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Why claiming early isn't always a smart move
If you're eager to get a jump-start on retirement, it's understandable to want to file for Social Security at 62. When you've been working for decades, waiting a few more years to start collecting benefits can be tough.
That said, claiming early will result in significantly smaller checks each month. By claiming at 62, your monthly payments will be reduced by up to 30% compared to if you'd claimed at your full retirement age (FRA). That could potentially reduce your monthly income by hundreds of dollars.
Also, claiming at 62 could result in receiving less money over a lifetime. In theory, you should collect the same amount in total whether you claim early or delay -- you'll either receive smaller checks for more years, or fewer but larger checks.
However, there is a break-even age where you'll receive more over a lifetime if you delay. For most people, this age is somewhere around your late 70s or early 80s. If you live past this break-even age, you'll collect more in total by delaying benefits. If you pass away before that age, though, you'd be better off claiming earlier.
Of course, nobody knows exactly how long they'll live. But if you're in good health and have reason to believe you'll live into your late 70s or beyond, you could receive more over a lifetime by delaying benefits.
When it pays to file early
In many cases, delaying benefits can be a smart move. You'll not only boost your monthly income (potentially by hundreds of dollars per month), but you could also collect more money over a lifetime.
That said, delaying benefits isn't the right move in all situations. For example, if you have a robust retirement fund and don't necessarily need the boost in benefits, it makes sense to claim earlier and start enjoying retirement sooner.
It's also important to consider your goals for retirement when deciding what age to claim at. Are you OK with reducing your expenses and living frugally so that you can retire earlier? If so, you might choose to claim at 62 even if you don't have a million-dollar retirement fund. But if your primary goal is to maximize your monthly income, you could be better off delaying benefits.
Finally, think about how your health could affect your decision. If you believe you might have a shorter-than-average life span, it may be wise to claim early so you can make the most of your benefits. Or if you simply want to live an active retirement, claiming early could give you more time to enjoy your early 60s when you're younger and healthier.
There's no right or wrong answer when it comes to what age to file for Social Security. For many people, delaying benefits is the best decision. In other situations, though, claiming early is a smart move. Whatever you choose, just make sure you've made this decision carefully, and that you'll head into retirement as prepared as possible.
