Will You Regret Claiming Social Security at 62?

Social Security doesn’t pay all seniors the same monthly benefit. Rather, that sum hinges on a few different factors:

• The number of years you spend as an active, tax-paying member of the workforce
• The amount of income you earn during your career
• The age at which you decide to claim benefits

And as far as the latter item goes, you have choices. If you wait until full retirement age (FRA) to sign up for Social Security, you’ll get the complete monthly benefit you’re entitled to based on your specific wage history. FRA is either 66, 67, or somewhere in the middle, depending on your year of birth.

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But Social Security allows you to claim benefits as early as age 62. And while that gives you access to your money sooner, it also means accepting a reduced monthly benefit for life.

Now for some people, filing for Social Security early makes a lot of sense. But does it make sense for you? Or is it a move you’ll regret throughout your retirement? If you’re not sure, ask yourself these questions to find out.

1. What do my savings look like as retirement nears?

It’s one thing to be approaching retirement with a $1.5 million 401(k) or IRA. But it’s another thing to be retiring with, say, $100,000, which isn’t a whole lot of money in the grand scheme of what could be a 20-year period or longer.

If you don’t have much savings, you may end up regretting the decision to claim Social Security at 62. A reduced benefit on top of minimal savings could make your senior years very stressful.

2. What shape is my health in?

If your health is poor going into retirement, you may not live as long as someone with strong health in their early 60s. Claiming Social Security at 62 can actually make a lot of financial sense when you don’t expect to live a long life. While you’ll lose out in the form of a lower monthly benefit, you might gain in the form of a higher lifetime benefit.

On the other hand, let’s say your health is outstanding at age 62, and at that point, your parents are still in relatively good health in their 90s. Let’s say your grandparents also lived well into their 90s.

Then, you have to ask yourself whether a hit to your monthly benefits is something you can afford. Not only might claiming Social Security at age 62 leave you with less lifetime income in a situation like this, but you might also start to struggle financially if your savings eventually start to run out on you.

3. What’s my job like?

Some people use Social Security as an exit strategy to escape a stressful job. If you’re feeling burned out and can’t imagine spending another month in the workforce, you may decide that filing for benefits at age 62 is an investment in your personal wellbeing, even if it means accepting a lower monthly payday for life.

On the other hand, maybe your job is one you still enjoy to some degree. And maybe you could see yourself hanging on for another year or two.

In that case, you might as well try to keep plugging away and delay your Social Security claim a bit longer. It’ll only put more money in your pocket on a monthly basis.

All told, filing for Social Security at age 62 isn’t automatically a bad decision. But if it’s a move you’re considering, think about how it might impact you given your personal circumstances. You don’t want to rush into your Social Security claim at 62 only to end up kicking yourself for years after the fact.

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