Key Points
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You can claim Social Security as early as 62, but you may not get your full benefits until 67.
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With potential Social Security cuts looming, you may be inclined to sign up for benefits as soon as you can.
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Doing so could make your life more difficult financially.
If your retirement income plan depends heavily on Social Security, the latest news on the program’s finances may be throwing you for a loop. The Social Security Board of Trustees recently reported that the program may have to cut benefits by 22% in just a few years if Congress doesn’t manage to intervene.
Thankfully, lawmakers have always managed to prevent Social Security cuts in the past. And there’s a good chance they’ll end up staving off cuts this time around, too.
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But that’s not a given. And it’s important to brace for potential cuts in case they end up happening.
In light of potential cuts, you may be inclined to claim Social Security as early as possible. But that’s a move that might end up hurting you.
Filing early isn’t necessarily the solution
The earliest age you can claim Social Security is 62. But you won’t get your monthly benefits without a reduction until full retirement age, which is 67 if you were born in 1960 or later.
You might think it’s best to file for benefits as early as possible, given the possibility of Social Security cuts. But that will shrink your benefits even more.
Your monthly Social Security checks will be reduced by roughly 30% if you file at 62 rather than wait until 67. If there’s a broad 22% cut after that, your net paycheck will be even smaller.
So if your plan is to get ahead of benefit cuts by filing for Social Security at 62, please do yourself a favor and rethink it. You might end up shrinking your monthly checks even more, making it harder to cover your costs.
Filing early can sometimes make sense
Of course, it’s not a universally bad idea to claim Social Security at 62. If you don’t expect to live a long life or have a pressing need for money, filing as soon as you’re eligible could be a sensible move.
On the other hand, if you have loads of retirement savings and plan to use your Social Security benefits for nonessentials like vacations or entertainment, it may not be a bad idea to start getting that money while you’re in better health to enjoy it.
The point should not be to claim Social Security early for the express purpose of squeezing out more money before benefits get slashed — if they get slashed. Over time, you might end up with a lot less income if you go that route.
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