Deciding When to Claim Social Security: Why Early Filing Can Be Beneficial

Experts often recommend postponing Social Security benefits until age 70 to maximize payments. According to the 2023 Social Security Administration data, retirees collect about $740 more each month at 70 than at 62. However, there are situations where claiming early makes sense. Here are three reasons to consider filing for benefits before age 70.

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1. The Desire to Retire Sooner

It’s possible to retire at 62 without claiming Social Security benefits until 70. This approach requires relying on other income sources during the waiting years, which can significantly impact savings. If you’re planning to retire in your early 60s, claiming Social Security early could help your savings stretch further.

While taking benefits earlier will reduce monthly payments, it might be more financially sound than delaying benefits and facing potential shortfalls. Remember, claiming at 62 can lower your payments by up to 30% compared to the amount you’d receive at your full retirement age, so it’s important to factor this into your budgeting.

2. Life’s Unpredictability

Retirement plans can be disrupted by unexpected life events. According to a 2024 survey from the Nationwide Retirement Institute, about 47% of individuals claiming Social Security began receiving benefits due to unforeseen issues like health problems or job loss. Delaying to age 70 may not be wise if health challenges arise soon after.

Filing early does involve financial trade-offs, but it also grants peace of mind. Social Security is structured so that, overall, your total benefits should average out, regardless of when you claim. Early filers receive smaller checks but for more years; those who wait collect larger checks for fewer years. Ideally, total benefits remain consistent over a typical lifespan.

3. The Option to Change Choices

One benefit of filing early is the option to withdraw your application within 12 months. If you change your mind, you can repay the benefits received and file again at a later date. This flexibility can be advantageous if your situation changes.

Another option is suspending benefits. Once you reach your full retirement age, you may pause Social Security payments until age 70 without needing to repay what you’ve previously received, resulting in increased checks once you resume filing.

Your choice of when to file for Social Security is personal and depends on your circumstances and retirement aspirations. While delaying benefits can enhance your monthly income, claiming early brings its own set of advantages.

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