3 Times It Actually Makes Sense to Claim Social Security at 62
Filing for Social Security at 62 carries a permanent penalty, yet for some retirees, waiting actually costs more. The right claiming age depends on factors most people overlook entirely.
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Age 62 is the earliest age you can claim Social Security. And you’ll often hear that doing so is a bad idea.
The reason? Filing for Social Security at 62 will permanently reduce your monthly benefits. If your full retirement age is 67, which is the case if you were born in or after 1960, filing at 62 will shrink your Social Security checks by 30% — for life. Depending on your situation, that could mean reducing your one guaranteed retirement income stream.
But that doesn’t mean claiming Social Security at 62 is always a mistake. Your ideal claiming age should hinge on a number of factors. And in these situations, it actually makes sense to claim Social Security at 62 rather than wait.
1. You have health concerns or expect a shorter retirement
One of the biggest advantages of delaying Social Security is receiving larger monthly checks for the rest of your life. But that strategy typically works best if you live long enough to enjoy those larger benefits.
If you have serious health problems or a family history of shorter life expectancies, waiting may not maximize your lifetime benefits. While claiming benefits at 62 will reduce your benefits, you’ll also potentially get more individual payments in your lifetime so that you ultimately come out ahead.
Of course, the tricky thing is that one knows exactly how long they’ll live. But your health and family history should play an important role in your claiming decision.
2. You need the money immediately to cover essential expenses
Claiming Social Security isn’t always about maximizing lifetime benefits. Sometimes, it’s about paying the bills.
If you’ve been forced into retirement due to downsizing or health issues and you don’t have enough savings to cover your living costs, claiming Social Security at 62 may be necessary. And it’s certainly a better option than accumulating high-interest debt just to stay afloat.
3. You want to preserve your retirement savings
Even if you have retirement savings, you may not want to withdraw heavily from your IRA or 401(k) during a market downturn. And if you’re faced with a market crash, claiming Social Security at 62 may be a better option than raiding your nest egg at a bad time.
Let’s say you retire at 62 thinking you’ll tap your savings to cover your costs for a while. If the market loses 30% of its value a month later, selling assets to generate income could mean locking in permanent losses you never recover from.
Claiming Social Security at 62 could allow you to leave your investments untouched for a few more years while the market rebounds. And depending on how much money you’re talking about, avoiding losses during a major market downturn could be worth the financial hit of reduced monthly benefits.
These are only a few scenarios where claiming Social Security at 62 makes sense. But ultimately, the best claiming strategy is the one that fits your financial needs, health, and long-term goals — not necessarily the one that works best for someone else.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, and CNN Underscored.
