As you approach retirement, you’ll have to make several crucial decisions. Where do you want to live? How will you manage your savings? And, most importantly, when should you start claiming Social Security?
Some choices, like adjusting your savings withdrawals, can be flexible. However, when you claim Social Security, the impact is long-term. That’s why it’s essential to understand the benefits and drawbacks of claiming early—especially at 62.
Why Claiming Social Security at 62 Can Be an Advantage
You can start receiving Social Security payments as early as 62, but there’s a catch—your monthly benefit will be permanently reduced. Despite this, one key advantage of claiming early is financial flexibility.
If you need immediate financial support, starting benefits at 62 can help you cover living expenses, travel, or enjoy retirement while you’re still active.
How Your Monthly Benefit Gets Reduced
Your Social Security benefits depend on your Full Retirement Age (FRA), which varies based on your birth year. Here’s how claiming early impacts your benefits:
| Claiming Age | Monthly Benefit Reduction |
|---|---|
| 66 | 6.67% |
| 65 | 13.33% |
| 64 | 20% |
| 63 | 25% |
| 62 | 30% |
For example, if your FRA is 67 and your benefit amount at that age is $2,000, claiming at 62 would reduce your monthly check to $1,400—a 30% cut.
Finding Your Break-Even Point
One way to decide when to claim Social Security is by calculating your break-even age. This is the point when the total benefits you’ve received from an earlier claim equal what you would have received by waiting.
Let’s compare a person with an FRA of 67 and a monthly benefit of $2,000:
| Age and Monthly Benefit | Total Benefits at 67 | Total Benefits at 68 |
|---|---|---|
| 62 ($1,400) | $252,000 | $268,800 |
| 65 ($1,733) | $249,552 | $270,348 |
The break-even point between claiming at 62 and 65 happens between ages 67 and 68. Similarly, the break-even between 62 and 67 happens around 78 to 79, and for 62 vs. 70, it is around 80 to 81.
If you expect to live well into your 80s, delaying Social Security may provide higher lifetime earnings. But if you need financial support earlier, claiming at 62 could be the right choice.
The Benefit of Early Payments
Beyond the numbers, choosing when to claim Social Security depends on your financial situation, health, and lifestyle goals.
Waiting until 65 means 36 months of missed payments. Claiming at 67 means 60 months without benefits, and waiting until 70 means going 96 months without a Social Security check.
Those who claim at 62 get immediate funds that can be used for:
- Covering living expenses without depleting retirement savings
- Traveling and enjoying life while in good health
- Exploring new hobbies or pursuing personal goals
Of course, everyone’s financial situation is different. But if you prioritize financial flexibility over maximizing lifetime benefits, claiming at 62 could be a smart move.
Maximizing Your Social Security Benefits
Most retirees overlook ways to increase their Social Security income. By understanding little-known Social Security strategies, you could boost your retirement income by up to $22,924 per year.
If you’re nearing retirement, take the time to evaluate your options. Whether you claim at 62 or wait until later, making an informed decision will help ensure a comfortable and financially secure retirement.
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