Choosing when to begin claiming Social Security benefits is one of the most important decisions you'll need to make as you're heading into retirement.
Age 62 is the earliest you can file, and it's also the most popular age to start receiving benefits. Nearly 35% of men and roughly 40% of women file for Social Security at age 62, according to a 2020 report from the Bipartisan Policy Center.
Claiming benefits early can be a smart move in some situations, but it's important to make sure you're aware of the potential drawbacks as well. There are a couple of rules to keep in mind before you claim early, and they could affect your benefit amount down the road.
1. Your benefits won't increase later
When you claim benefits as early as possible, you'll receive smaller checks each month. One common misconception, though, is that you'll start collecting larger payments once you reach your full retirement age -- which is age 67 for anyone born in 1960 or later.
In reality, once you file for benefits, your monthly payments are generally locked in for life (save for annual cost-of-living adjustments).
It's important, then, to plan accordingly when you choose what age you to claim. If you're depending on a benefit increase later in life, consider whether it may be beneficial to delay benefits by a year or two to collect larger payments each month. Or you may take steps to boost your savings so that you won't need to depend as much on Social Security.
2. Your age could affect your spouse's benefits in the future
If you're married, the age you file for benefits could affect how much your spouse receives down the road. This is because if one of you passes away before the other, the surviving spouse could receive the deceased spouse's entire benefit amount in survivors benefits.
However, to be eligible for these benefits, the surviving spouse's benefit must be less than what the deceased spouse was receiving. The survivor will also only receive the higher of the two benefit amounts, not both amounts combined.
For example, say you're receiving $2,000 per month in benefits and your spouse is collecting $1,500 per month. If you pass away and your spouse is entitled to survivors benefits, he or she would earn $2,000 per month -- not $3,500 per month.
If you have reason to believe your spouse may outlive you, consider how the age you claim could potentially affect his or her benefit amount. Claiming earlier results in smaller checks, and if you'll be receiving less than your spouse, that means he or she may not be eligible for survivors benefits if you pass away first.
Should you claim benefits early?
While claiming early isn't right for everyone, it is the best decision in some circumstances. If you have a solid retirement fund and don't necessarily need the extra money you'd receive each month by delaying benefits, for example, claiming as early as possible can give you a jump-start on retirement.
In addition, if you're battling health problems or believe you could face health issues in the future, claiming early can give you as much time as possible to enjoy retirement.
If you're planning to claim Social Security early, you're not alone. While it can be the right move in many cases, make sure you're aware of how these two rules could affect your monthly payments. By heading into retirement as prepared as possible, you can avoid any Social Security surprises and maximize your benefits.