Key Points
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Claiming at 62 allows you to begin living off the benefits.
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You don’t need to worry about breaking even.
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It may enable a higher-earning spouse to put off their own claim.
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Conventional wisdom says you shouldn’t claim Social Security at 62, even though that’s the age when you first become eligible for benefits. It’s easy to understand why that’s the case. You’ll face a significant reduction in your monthly payment if you start it so young.
For most people, full retirement age is 67, and early filing penalties apply before that age. So a claim at 62 would mean a 30% cut to your standard benefit. There’s no denying that that’s a big hit. Still, there actually are some reasons filing at 62 can make sense.
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Here are three reasons worth thinking about to see if any apply to you.
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1. You’ll have income to help you retire
The first and most obvious advantage of starting your checks at 62 is that you start receiving benefits that you can use to cover the bills. For many people, collecting this income is the key to retiring early.
While you’ll still need money in retirement plans to supplement the Social Security you’re collecting, your monthly Social Security check may combine with your savings to provide enough income to cover the bills and quit working sooner.
Sure, you could get a bigger check if you waited, but giving up those extra years of retirement may not be worth it for some people eager to start enjoying life.
2. You don’t have to worry about breaking even
The second big advantage of an early Social Security claim is that you don’t have to worry about breaking even.
If you delay your Social Security payments, you are leaving money on the table. You’re giving up benefits for years when you could have been collecting. Eventually, you make this up in the form of higher payments later, but only if you live long enough.
Typically, to end up better off by waiting on your Social Security claim, you must live into your early to mid-80s. Many people do, but not everyone. If you aren’t in good health and aren’t worried about how an early Social Security claim affects survivor benefits, starting your checks ASAP could be the smarter move.
3. You may be able to help a higher-earning spouse put off claiming
The third big advantage could apply to married couples.
If your spouse earned more money than you, your spousal benefits could potentially be higher than your own retirement checks. Your spouse should also have a higher retirement benefit, which they can increase by waiting to claim it. If the higher-earning spouse delays, your survivor benefits will grow as well.
Often, it makes sense for the lower earner to claim benefits at 62 so Social Security income starts coming into the household. This provides much-needed support that lets the higher earner wait to claim and supersize their larger Social Security payment. The lower-earning early claimer can then switch to spousal benefits, which become available after their husband or wife claims their own retirement checks.
If you’re married, it’s worth considering this popular strategy when making your retirement plans with your spouse to see if it is right for you.
If any of these three reasons resonate with you, you should seriously think about defying the conventional wisdom and starting those Social Security checks as soon as you can at 62.
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