Claiming Social Security at 62 is popular strategy because it gives recipients the most checks. At the same time, it reduces the size of their checks by up to 30%. That’s because the government penalizes beneficiaries for every month they claim benefits before their full retirement age (FRA), which ranges from 66 to 67 for today’s workers.
But that doesn’t mean claiming early is always the wrong decision. There are three main cases where it’s often the right call.
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1. You cannot afford to delay benefits
For retired-worker benefits, every month you delay claiming Social Security gradually increases your benefit, and this doesn’t stop at your FRA. You continue to grow your checks until you qualify for your maximum benefit at 70. That gives you up to 32% more per check than you’d get at your FRA, but to get it, you have to forgo benefits for eight years.
That might be doable if you have substantial personal savings or a job that provides you with a steady paycheck until you’re ready to apply. But those who don’t have other income sources may have no choice but to claim Social Security early.
This could reduce your lifetime benefit, but it’s a better option than falling into debt. Larger checks down the road are nice, but you have to prioritize your current financial security.
2. You have a short life expectancy
Delaying benefits often results in a larger lifetime benefit, but you have to consider your life expectancy too. Those who will live into their mid-80s or longer typically benefit the most from delaying; those with shorter life expectancies are better off applying earlier.
If you have a terminal illness or a poor personal/family health history, applying before FRA or as early as 62 allows you to receive as many checks as possible while you’re alive.
However, if you have dependents who rely on your income, you should know that claiming early will reduce the survivors benefit they’re eligible for after you pass away. If this is a concern, you can choose to wait.
3. You’re the lower-earning spouse
One popular strategy couples use to maximize Social Security benefits for the entire household is for the spouse who has earned less throughout their career to claim Social Security at 62. This provides the couple with benefits they can use to supplement their income while the higher earner waits to become eligible for larger checks.
When the higher earner signs up, the lower earner can switch to a spousal benefit if it’s worth more than the retired-worker benefit they were previously receiving. The spousal benefit can be worth one-half of what the higher-earning partner qualifies for at FRA.
This strategy typically works best for couples where there was a significant income disparity over their careers. If two partners have earned similar amounts throughout their careers, it’s often better for each to choose a claiming age based on their overall financial circumstances and life expectancy.
Even if you’re decades away from claiming Social Security, it’s helpful to have some idea of when you plan to apply. Choose a tentative claiming age now and adjust it as you get closer to retirement.
