With Social Security Uncertainty, Should You Claim Benefits Early?
Concerned about Social Security’s future? Before you file early, find out what could cost—or save—you thousands of dollars.
Dear Savvy Senior,
I turn 62 early next year and plan to retire soon after. Most advice says I should wait to claim Social Security because my monthly benefit will be higher. But with all the recent news about Social Security’s financial problems, I’m wondering if taking benefits early might be the safer choice. Is there ever a good reason to claim at 62?
–Ready to Retire
Dear Ready,
You’re definitely not alone in asking this.
The latest Social Security Trustees Report projects the retirement trust fund could be depleted around 2032 if Congress doesn’t act. If that happens, Social Security would still collect payroll taxes and pay benefits, but retirees could face an across-the-board cut of about 22 percent.
Before you rush to file, keep things in perspective. Most experts still expect Congress to step in, as it has before, to strengthen Social Security. And even if lawmakers don’t act, waiting would still produce a higher monthly benefit because any across-the-board benefit cut would apply to everyone. While claiming at 62 means collecting benefits sooner, it also permanently locks in a smaller check.
That said, there are several situations where claiming Social Security at 62 can make good financial sense.
How claiming age affect your benefits
You can start Social Security at 62, but doing so permanently reduces your monthly benefit by about 30 percent compared with waiting until full retirement age (67 for those born in 1960 or later). Delaying until 70 increases your benefit by about 24 percent.
For example, a $2,000 monthly benefit at full retirement age would drop to about $1,400 at 62, or rise to roughly $2,480 if you wait until 70.
When claiming early makes sense
For some retirees, claiming at 62 is a practical move. If you’ve stopped working and need income for basic expenses, Social Security can provide a steady check right away. It can also serve as a bridge if you retire early or lose a job in your early 60s while delaying withdrawals from retirement accounts or a pension.
Some retirees also claim Social Security early to reduce withdrawals from their IRA or 401(k) during market downturns. The tradeoff is a permanently reduced lifetime benefit.
For married couples, timing can be coordinated as part of a broader strategy. One spouse may claim early to bring in income while the other delays to boost their future or survivor benefit.
Health is another big factor. Delaying only pays off if you live long enough to collect those higher monthly checks. The break-even point between claiming at 62 and full retirement age is around age 78 or 79.
If you’re still working, be careful here too. Before full retirement age, earnings above Social Security’s annual limit can temporarily reduce your benefit, and claiming early locks in that lower amount for life.
Why delaying helps
For many retirees, waiting means a larger guaranteed monthly benefit for life and often a higher lifetime payout if you live into your late 70s or beyond. It can also provide stronger protection against outliving savings.
For couples, delaying the higher earner’s benefit can increase the survivor benefit, which may help provide more financial security for a surviving spouse.
Before deciding, it’s smart to review your numbers. You can create a free account at SSA.gov/myaccount to check your earnings record and estimate benefits at different ages. Tools like OpenSocialSecurity.com or MaximizeMySocialSecurity.com (a paid tool with a $49 fee) can also help you compare claiming strategies.
There’s no one-size-fits-all answer. For most people, waiting still makes the most sense. But if you need income, have health concerns or are coordinating benefits with a spouse, claiming at 62 may be the better choice. The key is to base your decision on your own circumstances – not fear about Social Security’s future.