Are you counting the days until you become eligible for Social Security benefits at age 62? If so, you’re not alone. Sixty-two has long been one of the most common ages at which to claim Social Security benefits — even as experts repeatedly advise waiting as long as possible.
Waiting to claim Social Security benefits is recommended because your benefits are reduced if you retire early — before full retirement age (FRA) — and they increase up until age 70 if you wait until after FRA. But just because you may get a larger monthly check by waiting to start your benefits doesn’t mean delaying is the smart choice for everyone.
In fact, there are plenty of reasons really smart people take Social Security at 62. Here are three of them.
1. Because they know they can’t predict the future
When you’re advised to wait to claim Social Security benefits, the reason is simple: You may be able to get more total benefits by delaying.
Since your monthly Social Security income goes up if you wait to claim, eventually that higher income will make up for the years of benefits you didn’t collect. As long as you live past the point where you break even, total benefits received will be greater.
There’s just one problem: Do you know how long you’re going to live? If you could predict exactly what would happen in the future, chances are good that you wouldn’t need to worry about how big your Social Security benefits will be. But since humans don’t have that power, it’s impossible to know if you would actually be better off waiting.
There’s a solid argument to be made that the smarter move is to take the dollars you’re given today, rather than hoping you’ll live long enough to get more hypothetical dollars a decade or more in the future.
2. Because they want to enjoy life while they can
The older you get, the more likely it is you’ll start to develop health problems. The question is: Would you rather have money now to travel or indulge your hobbies — or have extra cash later when you’ve developed limitations due to medical issues?
Around 92% of seniors suffer from one or more chronic conditions, and just over 3/4 of seniors suffer from at least two. There’s little sense in waiting to get a benefit that’s a few hundred dollars bigger if you won’t get that extra money until it’s too late for you to do much with it.
3. Because they can help a spouse earn better benefits
If you’re married, the goal shouldn’t be to maximize your Social Security benefits. It should be to maximize the benefits you receive as a couple.
Often, this means it makes sense to sacrifice your higher benefits to help boost your spouse’s Social Security income.
Let’s say your spouse earned a lot more money than you. If you both want to retire, you may need some Social Security income to live off of. If you can claim your benefits at 62, your higher-earning spouse could put off claiming. Not only would you end up with a higher total monthly benefit in the long run, but survivor benefits are also structured so that no matter which spouse passes away, the one left behind gets to keep the higher benefits.
Alternatively, sometimes one spouse earns a lot of money and the other doesn’t work or earns very little. In these circumstances, the higher earner may want to claim benefits at 62 in order to make it possible for the other spouse to claim benefits based on the higher earner’s work record.
Spousal benefits can equal up to 50% of the Social Security check received by the primary beneficiary, but these spousal benefits aren’t available until the primary beneficiary has begun claiming. If your spouse is waiting on you to start getting his or her own income from Social Security, claiming ASAP could be a good choice.
Should you take Social Security benefits at 62?
Are you convinced taking Social Security at 62 can be a smart move? The important thing to remember is that different people benefit from claiming benefits at different times.
You need to understand how Social Security benefits are calculated, determine how your retirement age affects your benefits, and make a choice that makes sense for your family and finances.