The early bird catches the worm, but what does the early claimer of Social Security benefits catch? Well, in many cases, they collect more money, in total, from Social Security than do those who start collecting benefits later.
You can start collecting regular Social Security retirement benefits as early as age 62, and as late as age 70. Here's a look at three reasons why you might want to claim your checks early.
No. 1: To retire early
Life, for many of us, is short -- or at least shorter than we would like. Those of us working as long as possible may end up surprised at how brief our retirement ends up being, or we may end up in relatively poor health, unable to make the most of retirement when we finally retire. If you can afford to stop working sooner than you'd planned, claiming your Social Security benefits in your early 60s can help you retire early.
Retiring early means you'll probably still be fit enough to do the traveling you've long wanted to do, and to enjoy recreational activities such as golf, tennis, gardening, and more. You can probably spend more quality time with family members, too -- perhaps especially your grandchildren, before they grow up.
No. 2: To maximize your benefits
Another reason to claim your benefits early is so you can maximize them. Know that each of us has, in the eyes of the Social Security Administration (SSA), a "full retirement age" at which we can start collecting the full benefits to which we're entitled, based on our earnings history. For most of us, it's 66 or 67. If you start collecting before you reach your full retirement age, your benefit checks will shrink -- by up to about 30%.
Meanwhile, for every year beyond your full retirement age that you delay starting to collect Social Security, your benefits will increase by about 8%. So delay from 67 to 70, and you can collect checks that are about 24% bigger. Delaying might seem like a no-brainer decision, and for some people delaying is the best thing to do -- but remember that while starting early means smaller checks, you'll be collecting a lot more of them.
Overall, the system is designed so that those who live average-age lives collect roughly the same total amount no matter when they start collecting. So each of us needs to do our own calculations. If your family line is not blessed with longevity, or you're not in good health, starting to collect early can make great sense.
No. 3: To coordinate with your spouse
Finally, you might want to start collecting Social Security early if doing so is part of a coordinated strategy with your spouse. Remember that when one partner in a marriage passes away, the survivor can collect his or her own Social Security checks, or the checks of the deceased partner -- whichever is greater. So a couple might aim to delay collecting Social Security for the higher-earning spouse as long as possible (until age 70), and might start collecting checks for the lower-earning spouse early. Each couple's situation is different, so it's worth exploring the many strategies that exist.
Give some thought to when you should start collecting your Social Security benefits, in order to get the most out of the program. Don't be shy about asking for help, either. You might read up on the topic or even consult a financial planner.