The 4 Best Reasons to Claim Social Security at 62
Social Security retirement benefits first become available at age 62. While you may want to start your audits as soon as possible, doing so has serious financial implications. Specifically, starting checks so young means reducing checks by as much as 30% (depending on your full retirement age) as you get the maximum number of early filing penalties.
Despite the fact that your monthly retirement benefits are reduced by an early claim, sometimes it still makes sense to start your checks at 62. In fact, there are four situations where applying for benefits ASAP is exactly the right move.
1. You have serious health problems
Sixty-two is the earliest age at which you can start receiving benefits. If you defer a claim for: Social Security Checks after that age, your monthly benefit will increase for each month you wait. But of course you are missing out on income that you could have gotten if you hadn’t waited.
It may make sense to postpone the start of your checks if you live long enough for the extra money you get by waiting to make up for the lost income. But if you have health problems, you may not get extra checkups for long if you die young. So you could be much better off by start with your checks as soon as possible.
2. You can use up your savings if you are not entitled to a benefit
Sometimes you have to retire at a young age or work less. If that happens when you’re 62 (or younger) and you don’t claim your Social Security once you qualify, you may need to rely on your nest egg to generate income to live on.
Without Social Security coming in, you would inevitably have to make larger withdrawals from your brokerage accounts, as they are likely your other main source of retirement funds. If delaying a Social Security claim requires such large withdrawals that you risk drying up your nest egg, you’re much better off starting checkups at age 62 to preserve your retirement savings.
3. You want a higher-earning spouse to hold off on claiming
If you are married, coordinating with your spouse is critical to make the most of Social Security. In many cases, it makes sense for the lower-income partner to start using their checks at age 62. This can provide the couple with the necessary income to live on, while the higher earner defers their own claim for benefits.
Deferring the higher earner’s claim makes sense for two reasons. First, they get a bigger boost from deferring, since the increase in Social Security checks that comes from waiting to claim them is calculated as a percentage of your benefit amount. Second, a higher earner who defers his claim can result in larger widow survival benefits because the last surviving spouse gets to keep the higher of the two checks both partners received.
4. You’d rather have the money when you’re younger
While delaying the start of your Social Security checks will increase the income they will bring, it also increases the likelihood that you have developed health conditions that affect your ability to enjoy your money.
Many people would prefer smaller benefits when they are younger so that they can do things they enjoy with the money, such as travel. As long as this does not leave you with too little to live on, this can also be a good approach for you.
Ultimately, you need to consider your own individual situation and think about your health and your priorities as a retiree to decide whether claiming Social Security at age 62 makes sense for you. Don’t assume that just because you get smaller monthly checks, you’ll be worse off with an early claim.