Ask most workers and seniors if they're willing to accept a 22% benefit cut when Social Security's trust funds are depleted in six years, and they'll say absolutely not. Yet a surprising number of seniors choose to sign up for benefits as early as possible, even though this move can permanently reduce their checks by 30%.

For some people, early claiming genuinely makes sense. For others, it could be a costly mistake. To know which camp you fall into, you have to understand how your claiming age affects your checks and how your benefits fit into your larger financial picture.

Image source: Getty Images.

How claiming Social Security early can shrink your benefits up to 30%

No matter when you sign up, the Social Security Administration first calculates the benefit you qualify for at your full retirement age (FRA). This is 67 for most people today. Then, it adjusts this benefit up or down, depending on your age at sign-up.

Early claiming reduces your benefit by 5/9 of 1% per month for up to 36 months and 5/12 of 1% per month thereafter. That's enough to shrink your benefit by 30% if you plan to apply as soon as you turn 62.

The loss is generally permanent, although some people who lose money to the earnings test may see a one-time benefit boost once they reach their FRA. It's also possible to undo your Social Security claim within the first 12 months after sign-up, but you must repay all the money you've received so far. Rather than trying to undo your decision later, take time to think carefully about whether applying at 62 makes sense before you do it.

When you might want to apply for Social Security at age 62

Applying for Social Security at 62 can make sense in three key situations. First, if you're unable to work and don't have much in savings, your benefits could mean the difference between financial security and falling into debt. In that case, applying early is a no-brainer, even if it means settling for a smaller lifetime benefit.

You may also choose to apply early if you have a short life expectancy. This could actually get you your largest lifetime benefit. However, if you have any family members who will be dependent on your survivor benefits after you're gone, early claiming will reduce what they get once you've passed away. If that bothers you, you might choose not to receive checks at all while you're alive.

Finally, if you're married and your spouse has earned significantly more than you throughout your career, you may decide to apply for your own retirement benefit early. This could help your spouse delay until they're eligible for larger checks. Then, when they apply, you can switch to a spousal benefit if it's worth more than what you're already receiving.

If none of these things apply to you, it might be worth delaying Social Security until your FRA or beyond to maximize your lifetime benefits. Every month you wait to apply increases your checks until you qualify for your largest benefit at age 70.