Revisiting Social Security: Should You Claim at 62?

Social Security offers more options than many realize. Eligible individuals have a significant window to enroll for benefits leading up to retirement.

The earliest you can claim Social Security is age 62. If you wait until your full retirement age, which is 67 for individuals born in 1960 or later, you will receive full benefits based on your earnings history.

Image source: Getty Images.

Choosing to sign up between ages 62 and 67 results in reduced benefits, with a greater deduction the earlier you file. Alternatively, delaying benefits past full retirement age can lead to increased payments, but this option is only available until age 70.

Why Claiming Early May Not Be a Bad Idea

In the past, I strongly advised against claiming Social Security at age 62. This perspective has shifted over the years. A major concern was that many Americans lack sufficient retirement savings. According to Prudential’s findings, the median retirement savings for 55-year-olds is under $55,000, which makes early claiming a poor choice for many.

However, this doesn’t apply to everyone. Many individuals nearing retirement may have significant savings. If you’re among them, claiming Social Security at 62 can be a strategic move.

While you may reduce a guaranteed income stream for life, early claiming might afford you earlier retirement or the chance to enjoy hobbies and experiences while you’re still healthy.

Moreover, even those with limited savings can manage by claiming at 62, provided they keep their expenses in check. Downsizing your home and maintaining a modest lifestyle can allow for a comfortable retirement, even with reduced benefits and modest withdrawals from savings.

It’s also important to consider your lifespan. For individuals who may not live into their 80s or 90s, claiming Social Security early could lead to more total benefits received, especially if they pass away in their 70s.

Ultimately, since no one can predict their longevity, claiming benefits early may grant you added peace of mind.

The Value of Flexibility in Financial Decisions

If you have always planned to claim at your full retirement age or later, be open to adjusting your strategy given your circumstances. For example, if your work environment has become increasingly stressful, the decision to take benefits at 62 could be the right move.

Part-time work post-claiming can help if you desire to stay engaged. However, receiving benefits can provide some financial relief from an unsatisfactory job situation.

This is just one scenario. The bottom line is that claiming Social Security at 62 doesn’t necessarily equate to a poor financial decision. Even if it doesn’t lead to increased long-term funds, early claiming can offer greater life flexibility when you need it most.

The $22,924 Social Security Bonus Often Missed

If you’re like many Americans, you may not have saved sufficiently for retirement. However, understanding certain “Social Security secrets” might enhance your retirement income. For instance, one straightforward strategy could yield up to $22,924 more each year! Learning how to optimize your Social Security benefits could lead you to a more secure retirement. Click here to discover how to harness these strategies.

View the “Social Security secrets” »

The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.