I’d Tell Anyone in This Situation to Claim Social Security at 62

Age 62 is the earliest age at which you can sign up for Social Security. And it’s an age many seniors choose when it comes to filing for benefits.

The problem with claiming Social Security at age 62, though, is that you’ll have to accept a reduced monthly benefit for life. You’re only first entitled to your complete monthly benefit, based on your wage history, once you reach full retirement age, or FRA. But FRA doesn’t kick in until 66, 67, or somewhere in between, depending on the year in which you were born.

Filing for Social Security at age 62 could end up being very detrimental to your retirement. If you slash your monthly benefit, you might end up pretty cash-strapped as a senior in the absence of having a robust nest egg. But despite that hit, there’s one situation where it absolutely makes sense to file for Social Security at age 62.

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When there’s an exception to the rule

For many seniors, it pays to wait until FRA or even beyond to claim Social Security to score a higher monthly payday for life. (For each year you delay your filing, up until the age of 70, your Social Security benefit will get an 8% boost, and a permanent one at that.) But if your health is poor, to the point where you don’t anticipate living a very long life, then it generally pays to err on the side of claiming Social Security early.

By filing for Social Security at 62, you might slash your monthly benefit by up to 30%, compared to what you’d get at FRA. But you’ll also start to get your money up to five years earlier. And that could result in a higher lifetime payout if you end up passing away at a relatively young age.

Let’s say you’re entitled to a monthly benefit of $2,000 at an FRA of 67. If you sign up for Social Security at age 62, you’ll only end up with $1,400 a month.

You might think you can’t afford that $600 monthly hit. But it’s important to look at the big picture.

Let’s imagine you only end up living until age 75. In that case, you’ll end up with $26,400 more in Social Security income by virtue of taking benefits at 62, despite slashing those monthly payments by $600.

A tough call to make

Being in poor health doesn’t always mean facing a shorter life expectancy, so that’s the risk you take by filing for Social Security early. But if you don’t expect to live a very long life, it generally pays to claim benefits as soon as you can.

If your health is average or good, then you may want to consider waiting until FRA to claim Social Security. But if that’s not the case, filing early at least guarantees that you’re starting to get your money from a younger age. And that might end up working to your advantage from a lifetime-benefit standpoint.

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