Key Points
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Age 62 is the soonest you can sign up for Social Security.
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If you claim benefits early, you’ll reduce them for life.
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You don’t have to spend your money if you claim Social Security early, and that way, you’re not gambling with your lifetime payout.
If you’re eligible for Social Security benefits in retirement, there are a number of different filing ages you can choose from. If you wait until full retirement age to claim benefits, which is 67 for anyone born in 1960 or later, you’ll get your complete monthly Social Security check without a reduction.
But for each month you claim benefits ahead of full retirement age, they get reduced permanently. And if you sign up for Social Security at 62, which is the earliest filing age possible, you’ll be looking at about a 30% cut to your benefits compared with filing at 67.
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Because of the financial penalty associated with claiming Social Security at 62, I used to think that doing so was a bad idea. But I’ve since changed my mind. Here’s why I’m now convinced that 62 is a great time to file.
1. You don’t necessarily need to spend the money
Claiming Social Security at 62 will absolutely result in smaller monthly checks. But does that mean that you won’t benefit financially? Not necessarily.
Just because you start receiving Social Security benefits at 62 does not mean that you have to spend the money. And if you’re a shrewd investor, you might do better putting that money to work in an investment portfolio than growing your benefits by waiting to put in your claim.
2. You can buy yourself experiences
Claiming Social Security at 62 means accepting smaller benefits, but it could afford you an opportunity to take some of your dream trips while you’re on the younger side. It could also be your ticket to meeting other big goals, like starting a business you’re passionate about.
While it’s possible to do these things later in life, good health is never promised. So if you’re eager to put the money to good use at 62 and fulfill life goals, then you shouldn’t necessarily force yourself to wait on Social Security.
3. You might get more peace of mind
Though signing up for Social Security at 62 will reduce your benefits on a monthly basis, it won’t necessarily reduce them on a total lifetime basis. In fact, if you don’t end up living very long, you could come away with a larger lifetime payday from Social Security by signing up early.
The tricky thing, of course, is that no one can predict their own life expectancy. But if you claim benefits at 62, it might give you more peace of mind knowing you at least starting getting the money you’ve earned as early as possible.
Claiming Social Security at 62 isn’t right for everyone
I want to issue one big caveat in the context of all of these points. If you expect Social Security to be your only source of retirement income, then I don’t necessarily recommend signing up at 62. That’s because you may not be able to afford such a drastic hit to your benefits.
But if you have a decent amount of retirement income coming your way from other sources, like savings, a pension, and investments, then the above advice applies. That doesn’t mean it’s right for you, but it is something worth considering when making your filing decision.
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