Key Points
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At 62, your Social Security benefits will be reduced by 30% compared to waiting until 67.
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Filing at 62 could be dangerous if you hardly have any savings and expect a long retirement ahead of you.
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It could also hurt your spouse, who may end up relying on survivor benefits from Social Security.
Once you turn 62, you’re allowed to start collecting Social Security. But you’ll face a pretty steep reduction in your monthly checks if you file at 62.
If your full retirement age is 67, which is the case for anyone born in 1960 or later, claiming Social Security at 62 means shrinking your monthly checks by about 30%. And that reduction is for life.
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Now, if you have plenty of savings and can afford a hit to your benefits, having that money come your way sooner could do you a world of good. Here, however, are some reasons not to take benefits at 62.
1. You barely have any savings
You can treat a robust IRA or 401(k) balance as permission to file for Social Security as early as possible. If your savings can more than cover your living costs and you’ll be using Social Security as extra money, filing at 62 often makes sense.
But if you don’t have much in savings and will need Social Security to cover your basics like shelter, healthcare, and food, filing at 62 could mean struggling to pay your bills throughout retirement. In that case, waiting until full retirement age or even beyond may be a much smarter choice.
2. You expect to live a long life
Social Security is designed to pay people roughly the same lifetime benefit regardless of the age at which they file. The logic is that an early claim will result in reduced checks but a greater number of checks. Waiting will make those payments larger each month, but you’ll collect fewer payments in total.
If you live an average lifespan, things should basically even out, according to Social Security. But if you expect to live a long life, waiting to file for benefits could put a larger lifetime Social Security check in your pocket. So if your health is outstanding and your parents are still alive in their 90s, that could be a signal to wait.
3. You’re the higher earner in your household and are much older than your spouse
Claiming Social Security at 62 may not just impact you. If you’re married, it could affect your spouse.
If you’re much older than your spouse, they may end up outliving you. And if you’re the higher earner of the two of you, you should be eligible for survivor benefits from Social Security in the event you pass away first.
If that’s the case, claiming benefits at 62 doesn’t just mean reducing your monthly checks. It also means reducing your spouse’s potential survivor benefits.
Claiming Social Security at 62 isn’t the wrong choice for everyone. But if you don’t have a lot of savings, anticipate a long lifespan, and expect your spouse to be reliant on survivor benefits, it pays to consider waiting.
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