Key Points
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People who file for Social Security at 62 shrink their benefits on a monthly basis.
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Filing early doesn’t automatically mean you’ll get less lifetime income from Social Security.
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An early claim could work to your advantage in ways that aren’t purely financial.
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Figuring out when to claim Social Security isn’t easy. Though your monthly benefit is based on your personal wage history, your filing age determines if your benefit is paid fully, reduced, or boosted.
Full retirement age for Social Security is 67 for people born in 1960 or later. If you fall into that category, filing at age 67 allows you to get your exact monthly benefit based on your earnings record. And if you delay your claim past full retirement age, each year you wait boosts your benefit by 8% until you turn 70.
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Now, age 62 is the soonest you can sign up for Social Security. But claiming Social Security at 62 reduces your monthly checks by 30% compared to filing at a full retirement age of 67. And that reduction is permanent.
As such, you might think claiming Social Security at 62 is an unwise decision. In reality, it could work out extremely well for you.
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An early claim could put more lifetime income in your pocket
While filing for Social Security at 62 is guaranteed to shrink your monthly checks, you won’t necessarily end up with less income on a lifetime basis. If you don’t end up living very long, an early claim could leave you tens of thousands of dollars richer.
Imagine your full retirement age benefit is $2,000, but you claim Social Security at 62, leaving yourself with a monthly $1,400 check instead. Sure, you’re getting about $7,200 less per year in that scenario. But if you only live until age 73, the math works out in your favor.
In this example, by 73, you’re looking at a total of $144,000 in Social Security after filing at full retirement age, compared to $184,800 by filing at 62. So here, an early claim gives you almost $41,000 extra in benefits.
Even if you end up living a bit longer, the math could still favor filing for Social Security at 62. If you live until 78, a claim at full retirement ages gives you $264,000 in total Social Security. A claim at 62 gives you $268,800.
That roughly $5,000 difference isn’t as significant as the $41,000 difference above. But it’s a notable amount of money nonetheless.
There could be nonfinancial reasons to claim Social Security at 62
Even if you end up living a longer life, filing for Social Security at 62 could make sense, even if it results in a smaller lifetime benefit.
For one thing, your health may be better at 62 than 67. If you want to travel or participate in activities that require good mobility and stamina, claiming benefits at 62 could allow you to fund those things when your body’s still in shape for them.
Also, claiming Social Security at 62 could be your ticket to escaping a job that’s slowly but surely sucking the life out of you. If you’re tired of dragging yourself into work, those benefits could allow you to escape the grind, find a new or part-time job that’s more manageable, and preserve your mental and physical health in the process.
Don’t assume you’re making a mistake
To be clear, you do need to be careful when claiming Social Security at 62, because you could end up living a long life. And the longer you live, the more problematic reduced benefits could become. You might need a way to compensate for smaller checks on a long-term basis, whether it’s continuing to work in some capacity or having enough retirement savings to fall back on.
The point is that filing for Social Security at 62 isn’t always a terrible choice. In some cases, it’s the absolute best one.
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