Claiming Social Security at 62 Could Be a Dangerous Move for Retirees in This Situation
Key Points
Filing for Social Security at 62 will shrink your monthly checks by about 30% compared to waiting until full retirement age.
An early claim could also result in smaller survivor benefits for your spouse.
If you're the higher earner in your household, you may not want to sign up for benefits at 62.
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It's easy to see why so many seniors are tempted to file for Social Security at 62. Since it's the earliest age to claim benefits, filing at 62 means getting access to a guaranteed monthly paycheck sooner. That could make it possible to retire earlier or enjoy more financial wiggle room at a younger age.
But there's a serious drawback to claiming Social Security at 62. If your full retirement age is 67, which is the case if you were born in 1960 or later, filing five years early will reduce your monthly checks by about 30% for the rest of your life.
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Now you may be OK with that hit if it means getting your money earlier in life. But before you move forward with that decision, it's important to consider your spouse's needs.
An early Social Security claim could hurt your spouse
If you're the higher earner in your household, you should know that there's a lot riding on your Social Security claim. That's because if your spouse ends up outliving you, they'll typically be entitled to survivor benefits from Social Security. And the larger your monthly checks are, the more money your spouse should collect in your absence each month.
If you file for Social Security at 62 and shrink your benefits by 30%, you'll reduce your spouse's survivor benefits as well. Now with a massive IRA or 401(k) for them to live on, that reduction may not be so terrible. But if you expect Social Security to be your household's main source of retirement income, you may want to think twice before claiming at 62 -- especially if you think your spouse might outlive you by many years.
If you leave your spouse with less Social Security income, they may be forced to go back to work very late in life. Or they may have no choice but to reduce spending considerably, to the point where they have to skimp on things like groceries, heat, and medical care. That's probably not what you want.
Don't rush to claim Social Security at 62
In some cases, filing for Social Security at 62 can make sense despite the reduced monthly benefit it results in. But even if claiming benefits at 62 makes sense for you based on your personal financial situation, it's important to think about your spouse's needs before moving forward.
If you expect to pass away in your mid-70s due to health issues, for example, a claim at 62 might give you more Social Security in your lifetime despite reducing your checks every month. But if you expect your spouse to live until their 90s, that's a dangerous choice to make. So before you officially file a claim, look at the big picture, and make sure you're not setting your spouse up to struggle financially.
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