Social Security at 62 Isn’t Always a Mistake: The Math That Supports an Early Claim
Claiming Social Security at 62 locks in a permanent monthly cut, but for some people the lifetime math tells a completely different story. Your health, your spouse, and your retirement savings all tip the scales in ways most people never…
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There’s a common warning you’ll hear in the context of Social Security: “Don’t sign up for benefits too soon.”
The earliest age to claim Social Security is 62. But if you file for benefits prior to reaching full retirement age (FRA), your monthly checks will be reduced on a permanent basis.
FRA is 67 for people born in 1960 or later. Filing for 62 results in a roughly 30% benefit reduction compared to 67, which can be harmful to people who expect to rely heavily on Social Security for retirement income.
But that doesn’t mean claiming Social Security at 62 is always a poor choice. In one specific situation, it can actually make the most sense mathematically.
When you don’t expect a long lifespan
While claiming Social Security at 62 is guaranteed to reduce your benefits on a monthly basis, you won’t necessarily see them shrink on a lifetime basis. And if you don’t expect to live a long life, filing for benefits as soon as you can could put a greater sum of money in your pocket in total.
Let’s imagine your FRA benefit is $2,000. If you file for Social Security at 62, you’ll reduce each monthly check to $1,400.
But if you only live until age 75, guess what? The math works out in your favor.
If you claim Social Security at 67, by 75, you’ll have collected a total of $192,000 in benefits, assuming the numbers above. If you file at 62 instead, by age 75, you’ll have received $218,400. That’s a difference of $26,400.
Of course, the math flips when you live a longer life. In this example, claiming Social Security at 67 gives you a total of $432,000 at age 85 versus just $386,400 at age 62. So in this scenario, you’d lose out on $45,600 in lifetime benefits by filing early.
But if you don’t expect to live very long, then claiming Social Security at 62 could be a sound choice from a numbers perspective.
The one factor that should change your calculations
When you’re single, you should take your health and life expectancy into account and use them as the basis of your Social Security filing decision. But if you’re married, the math gets a little more complicated if you’re the higher earner in your household.
In that case, if you pass before your spouse does, they’ll be entitled to survivor benefits from Social Security that equal your monthly benefit. So while filing at 62 might put more lifetime income in your pocket, the same may not be true for your spouse with a reduced survivor benefit.
As you run the numbers, figure out what sort of impact an early claim on your part might have on your spouse. If you have a nice amount of retirement savings, a smaller survivor benefit may not hurt your spouse all that much. It’s when you expect Social Security to provide the bulk of your household income that you need to be a lot more careful with your filing decision.
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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 Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
