Sometimes claiming as early as possible is the best move for your retirement.
The age you begin taking Social Security will affect your monthly benefit amount for the rest of your life, so it’s wise to take this decision seriously.
You can begin claiming as early as age 62, but the longer you wait to file (up to age 70), the more you’ll receive each month. Delay until age 70, and you’ll receive your full benefit plus a bonus of between 24% and 32% per month. Many experts advise waiting longer to take benefits, as that could boost your monthly payments by hundreds of dollars.
While that can be a smart idea in some situations, there are also good reasons to consider filing as early as possible. If you’re planning to file for Social Security at age 62, here are three ways that could pay off.
1. It can make it easier to retire earlier
You don’t necessarily have to file for benefits as soon as you retire, but Social Security can often make retirement more affordable.
If you retire in your early 60s and delay benefits, you’ll need to rely on your savings or other income sources for potentially several years — which risks draining your retirement fund too quickly. Even though you’ll receive larger checks by delaying benefits, they may not be worth it if your savings have run out.
By claiming early, it’s easier to get a jump-start on retirement. While you’ll still receive smaller payments by filing at 62, you can keep more of your savings in your retirement fund. That, in turn, will help your money continue to grow throughout your senior years, stretching your savings further.
2. You can reverse your decision if you change your mind
Life can be unpredictable, and even if you have your retirement thoroughly mapped out, there’s always a chance you could have a curveball thrown at you. The good news about claiming early, though, is that you have the chance to reverse your decision if you change your mind.
Within 12 months of filing for Social Security, you can withdraw your application. You can only do this once, and you’ll also have to pay back all the benefits you’ve already received (as well as any Medicare payments). But after that, you can file again later in life.
While it’s not easy to reverse your decision, it can be a smart idea if you regret your choice. On the other hand, if you delay benefits and change your mind, you can’t go back in time and claim earlier.
3. Your claiming age may not matter in the long run
The age you file for Social Security will have a dramatic effect on your monthly benefit amount. But in theory, you should receive roughly the same amount over a lifetime no matter when you begin claiming.
If you file early, each check will be smaller, but you’ll receive more of them in total. By delaying benefits, you won’t collect as many payments, but each will be larger. While claiming early will still reduce your monthly income, the system is designed so that you shouldn’t miss out on any money in total as long as you live an average lifespan.
In some cases, you could come out ahead by filing early. If you have reason to believe you’ll live a shorter-than-average lifespan, you may collect more in total by claiming at 62. This isn’t the most pleasant topic to think about, but it could help maximize your lifetime income.
The right age to take Social Security will depend on your unique situation. If you’re looking to earn as much as possible each month, delaying benefits could be your best option. But in some cases, claiming at 62 could help you enjoy a longer and more fulfilling retirement.
