The Best Argument for Claiming Social Security at Age 62

On average, Social Security benefits make up about 30% of older Americans' incomes. Social Security is likely to provide a big chunk of your retirement income, too -- but whether it provides 30% or more or less than that is in your hands, to some degree.

Here's a look at why you might claim your Social Security benefits early -- and why you might, alternatively, choose to delay.

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When you can start collecting Social Security retirement benefits

You can start claiming Social Security retirement benefits as early as age 62 and as late as age 70. Starting the checks flowing before your full retirement age (which is 67 for most workers today) will make your checks smaller -- though you'll receive many more of them than if you started later. Delaying collecting beyond your full retirement age will make them bigger by about 8% per year.

Check out the following table, which details the effect of starting the checks rolling in sooner vs. later:

Data source: Social Security Administration. 

If your full retirement age is 67 and you expect to receive a monthly benefit check of $2,000 then, your check may be as small as $1,400 if you start collecting at age 62 or as big as $2,480 if you wait until age 70.

The best reason to claim Social Security benefits at age 62

So when should you claim those benefits? Well, there are many considerations, and the answer is different for different people. But here's the best reason to claim Social Security benefits early, such as at age 62: Because you need to.

It's nice to delay until age 70 to maximize your checks, but many people find themselves retired well before they planned to retire -- due to a job loss, for example, or a health setback. If you are suddenly out of work in your early 60s, you may not have enough income to live on without Social Security benefits.

You won't be alone, either. According to the Federal Reserve's last Survey of Consumer Finances, the average retirement savings for those age 45 to 54 was only $254,720, and for those age 55 to 64 -- retirement ages for many -- it wasn't much better, at $408,420.

Let's assume you've retired with $500,000, and we'll apply the flawed but still useful 4% rule to get a rough idea of how much income that might provide. The rule says to withdraw 4% of your nest egg in your first year of retirement, adjusting subsequent annual withdrawals for inflation. With a $500,000 nest egg, you'd start out with a $20,000 withdrawal in the first year.

Clearly, that won't get you very far. But if you add a Social Security benefit to that, you might boost it by $15,000 or $20,000 or even $30,000, depending on your earnings history. It may not be ideal, but it might help you survive, financially.

Here's another reason to consider claiming early: You stand a decent chance of living a shorter-than-average life. The Social Security system is designed so that for those who live an average-length life (recently around age 76, though higher for women and lower for men), it won't matter much when you start receiving your checks -- you'll collect roughly the same total sum throughout your retirement.

If you think you might live a relatively short life, starting the checks flowing sooner can get you more total Social Security income.

Reasons to delay claiming Social Security

There are, of course, some compelling reasons to delay starting to collect your benefits, too -- if you can. For starters, if you stand a decent chance of living a long life, maximizing your checks makes sense. If you're planning to work until your late 60s or later, delaying claiming benefits can also make sense. And a joint Social Security strategy with your spouse might also have you delaying claiming your benefits in order to maximize them while claiming your spouse's benefits earlier.

Whatever you do, make sure that you've thought through your options carefully in order to set yourself up for as financially secure a retirement as possible.