If you want to receive your standard Social Security benefit, you will need to wait until your full retirement age (FRA) to claim benefits for the first time. Depending on when you were born, FRA could be between 66 1/2 and 67 if you were born in 1957 or later.
You get to claim benefits before then if you want to, though -- as long as you accept a reduction in benefits. Or you can claim benefits later than FRA, earning a benefits increase for each month you delay until age 70.
Many financial experts advise waiting at least until FRA and ideally until 70 to start getting retirement benefits. This is due to the fact you can substantially increase your monthly income due to delay. But this isn't always the right choice.
In fact, there's one really good reason why you may want to claim your Social Security as soon as you can at 62.
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Here's the best reason to start Social Security at 62
The single best reason to start Social Security at age 62 is because doing so could mean you don't have to spend as much from your savings to support yourself. This could help make it easier to preserve your funds so you don't run out of money too fast.
See, if you have to -- or want to -- stop working, you'll need money to cover living expenses. If you don't get it from Social Security because you're delaying your benefits claim, you're going to have to take more money out of your retirement investment accounts. You may end up having to take too much since Social Security isn't supplementing you.
Most experts recommend withdrawing 4% of your retirement account balance or less in your first year of retirement, then making an upward adjustment each year to keep pace with inflation. If you find that you'd have to take more than this amount from your investment accounts in an effort to delay Social Security, you could be making a huge mistake.
Why compromising your savings to delay Social Security could lead to big problems
When you have money invested for retirement, and you take too much out too fast, this will not leave you with enough money to continue earning the returns you need to maintain your account balance.
The money you've withdrawn will be gone, and so will all of the potential future gains that money could have made for you. With less invested, you'll continue to make less from your investments each year and could go broke while you're still relying on your retirement accounts.
If you don't have supplementary money from savings, living on Social Security alone will be really difficult. Social Security benefits were designed to replace 40% of pre-retirement income -- not the 80% or 90% needed to maintain your standard of living. Social Security is meant to work in conjunction with savings, so draining your savings account should be a no-go unless you want to face serious financial hardship as a retiree.
If you claim your Social Security at 62 and doing so enables you to take less money out of your investment accounts in order to preserve your assets for the future, this is the right course of action. Don't risk having way too little money later just to get a little bit of extra Social Security money that still won't be enough to replace the funds that should be coming from savings.
