Age 62 has long been a popular age to claim Social Security, and for good reason. It's the earliest age you can sign up to start getting your money.
Now you'll often hear that filing for Social Security at age 62 is a poor choice. At the same time, there are plenty of people who will tell you that claiming benefits at age 62 makes a lot of sense.
So who's right? Well, actually, it depends on your personal circumstances more so than anything else.
Image source: Getty Images.
The upside of claiming benefits at 62
Filing for Social Security at age 62 means getting your money as early as possible. But that's the simplified version.
For you, collecting that money at age 62 could mean getting to travel at an age when your health is still strong. It could also mean getting to swap a demanding job for a more enjoyable role that's less harmful to your mental health. Or, it could mean getting to start the business you've always dreamed of running.
Filing for Social Security at age 62 could also end up making sense financially if you're worried you won't end up living a very long life. While you'll shrink your benefits on a monthly basis, by getting to collect that money sooner, you might end up with a higher amount of lifetime benefits.
The downside of claiming benefits at 62
You're entitled to your full monthly Social Security benefit based on your personal income history once you reach full retirement age. That age is 67 if you were born in 1960 or later.
Claiming Social Security before that point will result in a reduced benefit. And if full retirement age for you is 67, then filing at age 62 will mean accepting a 30% hit to your benefits -- for life.
An early Social Security filing could end up hurting you financially if you end up living a long life; you could end up with less lifetime income. Also, the longer you live, the more you risk depleting your savings in your lifetime. So in a situation like that, you'd want a higher Social Security benefit to fall back on, not a smaller one, wouldn't you?
It's a personal choice
There are plenty of good reasons to file for Social Security at age 62, and there are probably just as many good reasons to wait. So if you're about to turn 62 and are wondering whether you should claim benefits or hold off, the key is to run through a few key questions. Specifically, ask yourself:
- How's my health, and how might it impact my life expectancy?
- How do I feel about the idea of continuing to work?
- What will I do with my Social Security income if I start collecting it now?
- How confident am I that my savings will last throughout retirement?
It's also a good idea to sit down with a financial advisor and see what they say about claiming benefits at 62 versus waiting. Sometimes, an outside perspective can be helpful in arriving at the right decision.
All told, whether claiming Social Security at 62 is a good idea versus a bad one depends on you. Take your time to think things through so you don't regret your choice to file as early as possible or sit tight and wait.
