"If you sign up for Social Security at 62, you'll regret it." That's something you'll often hear come out of the mouths of financial experts who worry about retirees' ability to make ends meet.
Now to be clear, claiming Social Security at age 62 does have consequences. See, you're entitled to your full monthly benefit based on your earnings history at full retirement age (FRA). But FRA doesn't kick in until 66, 67, or somewhere in the middle, depending on your year of birth. And if you sign up for Social Security at 62, which is the earliest age you can file, you'll shrink your monthly benefit by up to 30% -- for life.
But while filing for Social Security at age 62 could clearly have some negative consequences, that doesn't mean it's a poor choice. It could, in fact, end up being the ideal choice.
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How badly do you want to fulfill your goals?
If you're 62 years old right now, you may be at a point where your energy level is still pretty strong -- but perhaps not as strong as it was four or five years ago. Meanwhile, let's say you have big plans for retirement -- you want to travel, train for a marathon, or spend your days hiking the most glorious trails in your county.
Well, guess what? If you postpone retirement another four or five years to avoid claiming Social Security early, you may not be in as good shape by the time you're ready to close out your career and pursue your goals. But if claiming Social Security at age 62 puts you in a position where you can do the things you want while you're healthy enough, then the hit to your monthly benefit may be worth it.
Of course, there's definitely something to be said for locking in a higher monthly Social Security benefit and enjoying the financial protection that comes with it. But throughout your retirement, you may have different opportunities to boost your income. You can invest savvily, monetize your home (such as renting a portion of it out), or get a part-time job.
The one thing you may not be able to get back is your stronger health and energy level. And if you're in a good place physically come age 62 and need to remain in that state to fulfill your goals, then claiming Social Security at that point could be your ticket to meeting your life objectives -- and feeling good about the fact that you did for the rest of your days.
A worthwhile risk
Filing for Social Security at age 62 and shrinking your monthly benefit in the process means taking the risk of falling short financially later in life. There's no denying that. But there are also steps you can take to make up for a lower benefit. And if you don't jump at the chance to pursue and meet your goals while your body is still able to cooperate, then you might really end up regretting it throughout your retirement.
