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3 Great Reasons to Take Social Security Benefits at 62

When banks started paying more interest last year on the heels of all those Federal Reserve rate hikes, I rushed to open a certificate of deposit to capitalize on the chance to earn a higher return on my money. My plan backfired on me, though, because had I waited a bit longer, I would've managed to snag an even higher interest rate on my money.

You might run into a similar issue if you file for Social Security at age 62. See, that's the earliest age you can sign up for benefits, and it's easy to see why you'd be eager to get your money right away.

But if you claim Social Security at age 62, you'll reduce your monthly benefit by 25% to 30% compared to what you'd get at full retirement age, which doesn't arrive until 67 if you were born in 1960 or later. That could end up being a pretty substantial hit.

In fact, you'll often hear that it pays to exercise patience when it comes to Social Security, because doing so could result in a higher monthly benefit. But in some cases, signing up to get that money at age 62 really is a solid bet. Here are three such scenarios.

1. You're out of work

Sometimes, the loss of a job is what inspires people to take early retirement. If you've been downsized out of a job, and you're struggling to find a new one that's suitable, then claiming Social Security may be your ticket to existing the workforce with dignity rather than having to take some menial job that makes you miserable so you can continue to put food on the table.

2. You want to do different work

Maybe you were an accountant all your life and you've always wanted to do work that's more creative — like design furniture in your basement workshop. If you claim Social Security at age 62, you can potentially take the opportunity to quit that accounting role and focus on a venture you might find a lot more rewarding.

3. You don't need to work — or worry about money in retirement

Taking a hit on your Social Security benefits by claiming them at 62 might hurt you if you're not in the best financial shape. But let's say that come age 62, you're sitting on a multi-million-dollar nest egg. At that point, you're in really good shape. You probably don't need to work any longer (and if you do, it might be for fun more so than the money). And you also probably don't need to worry about a smaller monthly Social Security paycheck.

It's all about what's best for you

Being impatient with financial matters can often come back to bite you. Case in point — the CD I'm stuck earning less money on until it comes due.

Similarly, in some cases, claiming Social Security at age 62 could end up being a harmful financial mistake. But that doesn't mean filing at that age is always a bad idea. And so before you assume it's a poor choice, think your own personal situation and what claiming benefits early will mean in light of it.

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