The age at which you begin claiming Social Security will have a significant impact on the amount you receive each month in benefits. Age 62 is the earliest you can file, but it will also result in smaller checks each month.
In fact, by filing at 62, your payments will be permanently reduced by up to 30%. However, despite the smaller checks, there are a few reasons why it may be wise to claim as early as possible, anyway.
1. You could receive more over a lifetime
In theory, the total amount you receive over a lifetime should be roughly equal, regardless of when you file for benefits. If you claim early, you’ll collect smaller payments, but more of them in total. By waiting a few years, you’ll earn larger checks, but won’t receive as many over a lifetime.
However, these calculations assume you’ll live an average life span. For most retirees, the break-even point — or the age at which the total amount you’d receive by delaying benefits equals what you’d earn by filing early — is somewhere in your early 80s.
In other words, you’ll likely need to live into your 80s or beyond for delaying benefits to be financially worth it. If you have reason to believe you may not live that long — or if you simply don’t want to bet your finances on your longevity — claiming early could be a smart move.
2. It can help your savings last longer
Not everyone has the luxury of choosing when to retire. If you lose your job, develop health problems, or are otherwise forced into retirement in your early 60s, it could be wise to claim benefits early.
You don’t necessarily need to start taking Social Security when you retire, but if you choose to wait, you may need to rely solely on your savings until you begin claiming benefits. That could drain your retirement fund more quickly than necessary, making it harder to make ends meet later in life.
3. You can change your mind later
Perhaps one of the best reasons to consider claiming Social Security at 62 is that you have the option to reverse your decision if you change your mind. Within 12 months of claiming, you can withdraw your application. You’ll need to pay back the money you’ve already received in benefits, but then you’re free to file again later.
If you can’t afford to repay your benefits, you can also suspend Social Security. With this option, you can simply press pause on receiving benefits once you reach your full retirement age. Then, when you’re ready, you can start collecting Social Security again — at which point you’ll receive larger checks.
If you’re on the fence about when to claim, filing early can sometimes be a wise strategy. After all, if you delay benefits and then wish you’d claimed earlier, you can’t undo your decision. While filing at 62 won’t be the best option for everyone, it can be a smart move for many retirees.
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