Social Security is a complex program. It doles out benefits to over 69 million Americans each month, so it's tough to accommodate that many people with a one-size-fits-all solution.
It is for perhaps this reason that retirees can claim benefits at different ages. Retirees can start claiming Social Security as early as age 62. They can also delay benefits until age 70. There are trade-offs to both options and certainly no one right answer, but here's the No. 1 reason to claim benefits early at age 62.
Understanding the trade-offs
If retirees can start claiming benefits as early as 62, why wouldn't they? Well, the main reason is that the benefits received at this age will be a lot less than what retirees could be entitled to if they wait.
Retirees pay Social Security taxes for years and often decades before they can claim benefits. The Social Security Administration (SSA) determines a person's benefits largely based on how many years they worked and how much they paid in Social Security taxes, which is based on annual wages. So, the more a worker makes, the more they pay in Social Security taxes, and the more in benefits they are likely to qualify to receive. However, workers can only pay Social Security taxes on wages up to $176,100 in 2025.
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The maximum amount of benefits one can qualify for, determined from these criteria, is called the primary insurance amount (PIA). The PIA is the maximum amount of benefits a retiree is entitled to at their full retirement age (FRA), which is 67 for those born in 1960 or after. This is important because it essentially sets a baseline for a retiree's benefits. If retirees start taking benefits prior to turning 67, they will see their benefits reduced, while waiting until 70 will increase benefits.
Claiming benefits at 62 can reduce a retiree's benefits by as much as 30% -- the earlier one takes them prior to their FRA, the more they are reduced. Meanwhile, retirees who wait until age 70 could increase their benefits by 24%. The purpose of this is to provide flexibility for retirees who want or need to take benefits at different times in their 60s.
Assuming one lives to the average life expectancy in the U.S., the actuarial adjustments are intended to give a retiree an equivalent amount of benefits through their life, regardless of the age they claim.
The main reason to claim at 62
If retirees can get higher benefits by waiting, why take them early? Well, the most obvious answer in my mind is that they need the money. By the time retirees reach their 60s, they could be at very different stages of their lives. Some might have saved enough to the point where they don't really need Social Security, while others may still be constrained financially.
One factor is health. If a retiree's health is struggling, they may need the additional funds to help pay for care and treatment. Or if there are questions about their life expectancy due to significant health issues, then it makes sense to claim benefits sooner than later, in order to make use of their hard-earned funds.
Another consideration is lifestyle. Some retirees are happier with less and decide to wait, while others may want to travel or purchase vacation homes and need more now.
I'll reiterate that there is no right or wrong decision. If at 62 a retiree is healthy and financially stable, then it likely makes sense to wait to claim benefits. But if retirees need the money, they shouldn't hesitate to claim benefits as soon as possible at 62.
