When it comes to claiming Social Security, people have many choices. You can sign up for benefits as soon as you turn 62. You could also sign up at 65 in conjunction with your Medicare enrollment. Or you could wait until your full retirement age (FRA), which for anyone not yet retired today will be 66, 67, or somewhere in between, depending on the year you were born. Indeed, you can file more or less anytime after you turn 62.
But if you wait until your FRA, you'll be eligible for what the government defines as your "full monthly benefit" based on your wage history. Filing prior to that will result in you getting smaller monthly Social Security checks for life.
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You can also delay your Social Security claim past FRA. For each year you wait (until you reach 70), your monthly benefits get an 8% boost.
You'll often hear that filing for Social Security at 62 is a move that will hurt you financially. By claiming benefits as early as possible, you'll reduce your check sizes to the greatest extent possible. If you have an FRA of 67, for example, filing for Social Security at 62 will slash your monthly payments by 30%.
But in some cases, claiming Social Security at 62 can actually work to your financial advantage.
When you come out ahead all-in
While filing for Social Security at 62 will mean getting less money on a monthly basis, you may end up getting more money on a lifetime basis. See, if you file for Social Security at 62, you will get more individual monthly payments than you'd get if you waited. And if you don't end up living a longer-than-average life, claiming Social Security as early as possible may work out better for you.
Let's imagine you're weighing whether to claim Social Security at 62 or at an FRA of 67. Let's also assume you'd get $2,000 a month at your FRA -- a sum that would be reduced to $1,400 if you filed at 62 instead.
If you live until 85, you'll wind up collecting a total of $45,600 more over the course of your retirement by waiting until FRA. But if you only live until you're 75, the numbers look very different. In that case, claiming Social Security at 62 would result in you collecting $26,400 more overall than you'd get if you waited.
And that's why claiming Social Security at 62 isn't automatically an unwise financial choice. Depending on your lifespan, it could end up putting more money into your pocket.
Consider the state of your health
Of course, it's hard to predict how many years you're going to live, which makes the decision about when to file for benefits more difficult.
But one thing you can do is assess the state of your health. If you already have a number of chronic conditions as you are heading into your 60s, then it could be wise to claim Social Security as early as possible. If your health is stellar, you may want to wait until your FRA or beyond to file for benefits.
No matter which way you choose, when it comes to the timing of claiming Social Security, you're taking a bit of a gamble since you can't predict your own life expectancy. But don't assume off the bat that filing for benefits at 62 will cause you to lose out financially. Depending on how things shake out, you could end up getting more money out of the program that way.
