Claiming Social Security at age 62 means taking a risk -- and a pretty big one at that.
You're entitled to your full monthly Social Security benefit based on your personal wage history once full retirement age (FRA) arrives. That age is either 66, 67, or somewhere in the middle, depending on your year of birth.
However, once you turn 62, you can sign up for Social Security at any point. There's no sense in delaying your claim beyond age 70, financially speaking. (But hey, if you want to wait until 71, the Social Security Administration is not going to force you to sign up.)
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Many seniors are eager to file for Social Security at 62 to get their money as early as possible. But for each month you claim benefits ahead of FRA, they get reduced on a permanent basis.
So if you're entitled to $2,000 a month from Social Security at age 67 and you file at 62 instead, you're looking at slashing that monthly paycheck to $1,400. Ouch.
Because of this, seniors are often cautioned against claiming Social Security at 62. But here's one reason you may want to file for benefits the moment you're able to.
When you've earned the right to do whatever you want
Many people unfortunately wind up approaching retirement with very limited savings. Seniors in that boat should strongly consider waiting until FRA to file for Social Security, or even delaying their claims past FRA to boost their monthly benefits in the process.
But if you're someone who's nearing retirement with millions of dollars in savings, then there's no reason not to claim Social Security at age 62 if that's what you want to do.
In fact, you should know that there's a risk to not signing up for benefits as early as possible -- you might get less total income from the program if you don't end up living a long life. So if you're in a position where you don't have to worry about the financial effect of a reduced benefit, then you might as well take the money as soon as you can.
Remember, too, that sometimes, even people with millions of dollars in savings stress about tapping their nest eggs in retirement. But let's say you want to travel in your early 60s rather than waiting half a decade, because your body is up for it now. If so, then you should absolutely consider claiming Social Security at 62 and using that money to see the world. Even if you have those funds socked away in savings, you might feel better about the idea of not taking withdrawals at a fairly young age.
A hit you've made it possible to take
Many seniors can't afford the hit to their Social Security income that would ensue with a filing at age 62. But if you've sacrificed and saved really well, then by all means, take that hit. You've earned it.
And chances are, it won't end up having a negative effect on your retirement at the end of the day. It might, however, allow you to do some of the things you gave up doing to be able to build the nest egg you've amassed.
