One of the most challenging decisions for retirees or those nearing retirement is when to claim Social Security benefits. Your filing age directly impacts your monthly payments, so making the right choice is crucial for your financial stability.
While age 62 is the earliest age to claim Social Security, filing at that age usually results in permanently reduced benefits. Before making your decision, consider these three key factors that could affect your financial future—and even your spouse’s.
1. Claiming Benefits Early Will Permanently Reduce Your Payments
Social Security recipients get one opportunity to reverse their decision if they regret claiming early. If you file at age 62 but later decide it was too soon, you can withdraw your application within one year—but only if you repay all the benefits you’ve received.
For many seniors, repaying thousands of dollars is not an option. This means that once you file at 62, your monthly benefit will remain reduced for life.
If you live a long life, this decision could impact your financial security. As your savings decrease, Social Security may become a more important source of income. Locking in a lower benefit early could leave you with less financial protection later.
2. Social Security Only Replaces a Small Percentage of Your Income
Even if you wait until full retirement age (FRA), Social Security is designed to replace only about 40% of your pre-retirement earnings. Filing at 62 further reduces that percentage, which could make retirement financially challenging if you don’t have other sources of income.
If you haven’t saved enough for retirement, an early claim could leave you with a much smaller monthly check than expected, making it difficult to cover basic expenses.
3. Filing Early Could Impact Your Spouse’s Financial Future
Your Social Security decision doesn’t just affect you—it can also impact your spouse, especially if they earned less than you or are younger than you.
If you pass away, your spouse may rely on survivor benefits, which are based on the amount you received. By claiming early, you lock in lower monthly payments, reducing the amount your spouse could collect in the future.
If your spouse is likely to outlive you and will depend on your Social Security, waiting to claim could provide them with a larger survivor benefit and greater financial security in retirement.
When Is the Best Age to Claim Social Security?
Your full retirement age (FRA) is between 66 and 67, depending on your birth year. While you can claim benefits as early as 62, waiting until FRA means receiving your full benefit amount.
If you delay past FRA, your monthly benefit increases by about 8% per year until age 70. After 70, there’s no additional increase, so claiming at that point maximizes your payments.
Final Thoughts
Before claiming Social Security at 62, carefully consider the long-term financial impact. While it may seem tempting to start collecting benefits early, doing so permanently reduces your monthly payments, affects your spouse’s survivor benefits, and limits your overall financial flexibility in retirement.
For a secure financial future, take time to evaluate your savings, expected expenses, and potential lifespan before making your decision.
Disclaimer – Our team has carefully fact-checked this article to make sure it’s accurate and free from any misinformation. We’re dedicated to keeping our content honest and reliable for our readers.
