5 Reasons to Take Social Security at 62 (And 5 to Put it Off)

Author: Maurie Backman | March 30, 2020

Social Security cards on various bills.

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What's the right filing age for you?

Your Social Security benefits are calculated based on your earnings history -- specifically, your wages during your 35 highest-paid years in the workforce. But the age you decide to claim benefits at will dictate how much money you receive each month.

You're entitled to your full monthly benefit based on your wage history once you reach full retirement age, which is either 66, 67, or somewhere in between, depending on the year you were born. But you can sign up for benefits as early as age 62. Doing so will get you your money sooner, but you'll also face a lifelong reduction in those benefits for claiming them ahead of schedule. With that in mind, here are a few good reasons to file for Social Security as early as possible.

Claiming benefits early makes sense in some cases, but in others, it pays to hold off.

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A visibly worried senior man holding a yellow cup while seated at a table with a large stack of bills in front of him.

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1. You're out of work and need the money

Filing for benefits at 62 means slashing your monthly income for life. But if you've been let go at work, or you can't work due to health issues or another reason (like the need to care for a loved one), and you don't have enough savings to support yourself, then filing at 62 makes sense. Doing so could be the one thing that helps you cover your basic expenses and avoid debt later in life.

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Older woman in bed with older man at one side and doctor at other side

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2. Your health is poor

Social Security is designed to pay you the same amount in total lifetime benefits regardless of when you file, provided you live an average lifespan. If your health is poor, and you're therefore likely to pass away at a younger age than the typical senior, you'll generally come out ahead financially in your lifetime if you file for benefits as early as you can.

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Senior man in apron holding a tray of cookies.

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3. You want to start a business

Many retirees start businesses of their own to stay busy and supplement their income. If claiming Social Security at 62 allows you to get a lucrative venture off the ground, your profits could more than make up for the hit you take on your monthly benefits.

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Senior looking at computer screen with growth chart on it.

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4. You're an investing wiz

Holding off on claiming benefits guarantees you a certain boost each year, and with investing, there are no guarantees. But if you're a seasoned investor and are confident in your ability to make a lot of money by putting your Social Security benefits to work, then claiming them at 62 could be a good idea.

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Senior couple on a yacht

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5. You can afford the hit and want the money to enjoy retirement

If you've saved nicely for your senior years and don't need your Social Security income to pay for basics, then claiming benefits at 62 could allow you to travel or enjoy other hobbies when you're younger. After all, you're apt to have more energy at 62 than at 66, 67, or whenever your full retirement age is.

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A married senior couple smiling as they work on their finances.

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But sometimes, waiting makes sense

On the other hand, filing for Social Security at age 62 isn't the best move for everyone. Here are a few good reasons to wait until full retirement age, or even beyond.

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A senior man counting fanned cash bills in his hands.

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1. You're low on retirement savings

You can't expect to live on your Social Security benefits alone, as they'll generally replace just 40% of your former wages, assuming you're an average earner, and most seniors need more like 70% to 80% of their former income to live comfortably. But if you don't have an adequate amount of personal savings to bridge that gap, you'll be more reliant on Social Security, in which case slashing your benefits is a bad idea.

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Senior woman working and talking on phone.

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2. You're still working

You're allowed to collect Social Security and a paycheck from work at the same time. But if you do so before reaching full retirement age, you'll risk having a portion of your benefits withheld once your earnings exceed a certain threshold. And, you'll face an automatic reduction in benefits for filing early. As such, it often pays to wait to sign up if you're able to keep your regular paycheck coming.

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Two seniors on a bike ride.

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3. Your health is great

Just as it pays to claim Social Security early when you're in bad health and are unlikely to live a long life, so too does it pay to delay benefits as long as possible when your health is outstanding and you're likely to outlive the average senior your age. That way, you'll collect a larger lifetime total. Though you're entitled to your full monthly benefit at full retirement age, if you hold off on filing past that point, you'll boost your benefits by 8% a year, up until age 70.

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Female home health worker with elderly woman.

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4. You want more spending money later on

Many seniors claim Social Security early so they can use that money for leisure purposes. But while having more spending money while you're relatively young may be appealing, consider the upside of having extra money at your disposal when you're older. It could be just the thing that allows you to take car service rather than public transportation to get around town once your mobility starts to decline, or that allows you to hire some help around the home when the maintenance you once did regularly becomes a struggle. Waiting to file for benefits at full retirement or after will give you more financial flexibility during the latter part of your senior years, when you may need it the most.

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Senior couple sitting on a bench.

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5. You want to leave a larger benefit for a surviving spouse

If you're married and pass away before your spouse, he or she will be eligible for survivors benefits from Social Security, and the monthly benefit your spouse gets will be the equivalent of what you collected (provided your spouse waits until his or her full retirement age to file). If you reduce your monthly benefits by claiming them at 62, you'll leave your spouse less money for life. If you wait, you could make life much easier on a spouse who ends up outliving you for many years.

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