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The earliest age you can claim Social Security is 62, but starting checks so young often isn’t the best choice. Filing for benefits at the earliest age of eligibility could mean significantly reducing your checks.
In some cases, seniors who file at 62 could end up with 30% less income than they’d have had if they waited until a full retirement age of 67. And, odds are that seniors who start their checks so young will end up with less lifetime income in addition to smaller monthly payments.
But while an early claim is often a mistake, that doesn’t mean it always is. In fact, there are two situations when you may want to get benefits the minute you’re allowed to file for them.
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1. To preserve your nest egg
If you stop getting a paycheck at 62 because you can’t find a job, have health issues, or must take care of loved ones, you’ll need to get income from somewhere. Chances are good you’ll have two choices: your savings or Social Security.
Often, if you try to delay a Social Security claim, you’ll end up over-relying on your savings and forced to make large withdrawals from your investment accounts just to cover your basic living expenses. If your withdrawals are too large, you could leave yourself with too little invested to continue earning the returns you need.
Draining your nest egg dry would be a huge mistake, because even with a larger Social Security benefit available by delaying your claim for retirement checks, you won’t be able to comfortably live on retirement benefits alone. If you need to claim Social Security so you can fund your lifestyle while keeping your distributions to 4% of your retirement account balance or less, you’re much better off doing so.
2. To enable early retirement when it wouldn’t otherwise be possible
Sometimes, when you hit 62 years old, you’re simply tired of working. You may want to enjoy life while you’re still young and healthy and before you develop age-related issues. You may be sick of the stress of your job and eager to indulge in hobbies you’ve been waiting a lifetime to spend more time on. Or you may have grandkids you want to start spoiling.
Whatever your motivations, if you want to retire early and can only do so with Social Security to help support you, it may very well be worth claiming benefits — even if doing so leads to a reduction in the size of your checks.
After all, it’s common for people to make decisions that are optimized for their lifestyle preferences rather than just the quest for more money. There’s nothing wrong with doing that when it comes to your Social Security claiming strategy, as long as you understand the consequences.
Ultimately, the benefits you’re entitled to are yours, earned through a lifetime of hard work and paying taxes. You deserve to be able to claim them when you want to, without guilt, so if you need the money to make early retirement or to preserve your nest egg, don’t feel bad about starting your checks at 62.
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