Sometimes, filing for benefits as early as possible makes a lot of sense.
There’s a lot of general advice on the internet in the context of retirement planning and Social Security. And a lot of that advice is probably going to steer you away from signing up for Social Security at age 62.
Age 62 is the earliest point to file for benefits, and you’ll get a smaller monthly Social Security check if you sign up at that point. To get your complete monthly Social Security benefit based on your personal income history, you have to wait until full retirement age, which doesn’t arrive until age 67 if you were born in 1960 or later.
Image source: Getty Images.
The danger in claiming Social Security at 62 is that you’ll commonly get stuck with a lower monthly benefit for life. There is a do-over option — something you can exercise once in your lifetime following an early filing.
But it’s not easy to undo a Social Security claim since it requires you to pay back every dollar in benefits you received within a year. So generally, when you claim Social Security at 62, you’re limited to the lower monthly benefit it comes with forever.
But while filing for Social Security at 62 may be a mistake for some people, that’s not automatically the case for you. And there’s one situation where claiming benefits at 62 absolutely makes sense.
When you want to enjoy your retirement sooner — and you’ve earned that right
If you expect Social Security to be your primary source of retirement income, then there’s a real danger in signing up at the earliest possible age of 62. Limiting yourself to a smaller monthly benefit could mean struggling to afford your basic expenses, especially since some, like healthcare, might increase substantially over time.
But if you’ve saved enough to make your 401(k) or IRA your primary source of retirement income, then you’re in a very different boat. And in that case, you shouldn’t hesitate to claim Social Security at age 62 if doing so is your ticket to enjoying your retirement to the fullest at a time when your health is optimal.
It’s not a given that your health will decline as work your way through your 60s. But it’s also fair to assume that your health might be stronger at age 62 than at age 67 or beyond. So if you’ve saved well enough to make it so that an early Social Security filing won’t hurt you financially throughout retirement, then it pays to claim benefits at 62 and use that money to enjoy life to the fullest.
If you force yourself to wait until age 67 or beyond to sign up for Social Security, you may not have the same experience doing things like traveling as you would five years earlier. You may find it more difficult to hike the tough trails on your bucket list or enjoy later nights out in the big cities you’ve dreamed about visiting. And it’s not worth compromising those experiences when you’ve saved so well and can afford to get your Social Security benefits sooner.
A decision to think through carefully
Because the monthly Social Security benefit you lock in at the time you file will generally be the benefit you’ll receive for life (aside from cost-of-living adjustments), it’s important to think through that decision with care. But if you’re in a strong place financially at age 62, then you shouldn’t hesitate to claim Social Security at that time — even if it means getting stuck with a smaller monthly paycheck.
