If you earn enough work credits in your lifetime to be eligible for Social Security, you can sign up for benefits as early as age 62. Doing so will mean slashing those benefits on a permanent basis. It’ll also mean getting your money a lot sooner than if you were to wait until full retirement age (FRA), which is the age at which you can collect your monthly benefit without any sort of reduction.
Now you’ll often hear that filing for Social Security at 62 is a move you’ll end up regretting — namely, because it’ll mean locking in a lower monthly benefit for life. But if any of these scenarios apply to you, claiming benefits at 62 could actually end up being a very smart move.
1. You’re worried you won’t live a long life
Social Security is technically designed to pay you the same lifetime benefit, whether you file as early as possible or you wait until FRA. The logic is that filing early will cut your benefits, but you’ll collect benefits a few extra years. Waiting, meanwhile, will give you fewer years of benefits, but higher payments on a monthly basis.
You should break even if you live an average lifespan. But what if you don’t? If you have reason to believe you’ll pass away at a relatively young age, then it actually pays to sign up for benefits as early as possible, because while doing so will mean getting a lower monthly paycheck, it could also mean securing a higher lifetime payout.
2. You need to escape a bad job situation
Unfortunately, some people’s jobs end up being bad for their health. If your work causes you a world of stress, or your physical working conditions put you at risk for medical problems, then filing for benefits at 62 could be your ticket out of a bad job situation. From there, you may have the flexibility to find a better job, or transition to a part-time job you can do more independently.
3. You have plenty of savings to fall back on
Many seniors inevitably wind up counting on Social Security to pay their basic living expenses. But what if you have more than enough money in retirement savings to cover things like housing, transportation, utilities, healthcare, and food? If the money you’ve socked away in your nest egg is enough to get you through your senior years without worry, then you may not need to wait until FRA to claim Social Security. And if that’s the case, signing up much earlier might allow you to better enjoy the first part of your 60s. You can use your benefits to travel, pursue hobbies, or even start a business that’s fulfilling to own.
The downside of claiming Social Security at the earliest possible age of 62 is pretty clear — you’ll guarantee yourself less monthly income for the rest of your life. When you think about it that way, that’s a pretty daunting notion. On the other hand, filing for benefits at 62 could actually end up working out better for you financially, and even if it doesn’t — meaning, you wind up living longer than expected and losing out on a bit of lifetime income — it could still afford you an opportunity to free yourself from a terrible job and spend your early 60s doing the things you’ve always dreamed of.
