You're allowed to claim Social Security starting at age 62. Beginning your benefits at the youngest possible age has one big downside: You'll get hit with early filing penalties. These can reduce your benefit by as much as 30%, compared to the standard amount you'd receive if you had waited until Social Security's official full retirement age (FRA), which depends on the year you were born and for most people is somewhere between 66 and 67 years old. You'll also lose the chance at a benefits boost that applies for each month you wait after FRA until age 70.
While your benefits are going to be a lot smaller at 62, there are some big advantages to claiming them as soon as you can. Here are three great reasons why you might want to claim your first Social Security retirement check the minute you become eligible to do so.
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1. You can enjoy your money at a younger age
If you wait until 67 or 70 to take Social Security, you may have to work longer or skimp and save to get by on the money in your investment accounts alone. Unfortunately, for many retirees, health issues start at a much earlier age than expected, and that can keep you from working as long as you'd like and result in higher costs of living.
At best, you could spend your last few years of really good health pinching pennies or working at a job you don't like. Or you could claim Social Security at 62 if it enables you to retire early and actually enjoy life.
2. You won't have to worry about outliving life expectancy to break even
Delaying your Social Security claim pays off only if you outlive your life expectancy. The benefits program was designed with a system of early filing penalties and delayed retirement credits so you could theoretically claim benefits anytime between ages 62 and 70 and get the same lifetime benefit amount.
If you wait beyond age 62 to start your checks, you'll miss months or years of Social Security income, depending on how long you delay. If you don't outlive the life expectancy projected when the benefits program was designed, you may not even make that missed income back, much less end up with more in total lifetime benefits.
It's true that for married couples, claiming at 62 could reduce your spouse's survivor benefits if you were the higher earner. But this isn't an issue for singles or for those whose spouses had similar or higher earnings.
Sure, claiming at 62 means you could end up with less income throughout your life if you do happen to live longer than projected. But you'll have money coming in for all those early years, when you might want it the most.
3. You can get money now before the buying power of benefits keeps falling
Finally, there's another great reason why you could end up better off by claiming Social Security at 62. You can get your benefits while they still have maximum buying power.
Benefits are supposed to adjust to keep pace with inflation, but the formula used for cost-of-living adjustments is an imperfect one. As a result, the Senior Citizens League estimates that benefits have lost 36% of their buying power since 2000.
If the real value of your benefits keeps eroding over time, it makes sense to claim them as soon as you can and start using the money before inflation eats away at the real value of your retirement checks.
For all three of these reasons, you may want to think seriously about starting Social Security at the age of 62. It may well give you the best chance at enjoying the retirement income you've worked hard to earn all your life.
