How Claiming Social Security at 62 Affects Your Monthly Income for Life

One of the biggest decisions you'll ever make related to Social Security is when to claim your benefits. Claiming early means you'll get smaller checks -- though many more of them -- while delaying claiming can help you maximize your benefit (while receiving fewer checks in total).

Here's a look at how this decision can affect your retirement income.

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Social Security 101

Each of us has a "full retirement age" at which we can start collecting the full Social Security benefits to which we're entitled based on our earnings. The full retirement age is 67 for those born in 1960 or later.

You can start collecting your benefits as early as age 62, or you can delay until age 70. (Delaying beyond age 70 offers no benefit.)

The table below shows the percentage of your full benefits you'll receive at each starting age:

Data source: Social Security Administration.

As of April, the average monthly Social Security retirement benefit was $2,081, or about $25,000 annually. That's not a huge amount of income, but if your earnings were above average, so too will be your Social Security benefits -- up to a point. (Still, there are ways to beef up your benefits, especially if you're still working.)

What claiming at 62 does

So, how will claiming your benefits at age 62 affect your income for life? Well, if your full benefit amount -- the sum you'd receive if you started collecting checks at 67 -- is, say, $3,000 per month, starting at age 62 would shrink that sum to $2,100 per month.

Let's say that you live to age 85. Let's also ignore Social Security's nearly annual cost-of-living adjustments (COLAs), for now. If you start with $2,100 monthly and live to 85, that's 23 years of benefits, and a total received of $579,600. If you start at age 67 with $3,000 monthly, that's 18 years of benefits and a total received of $648,000. You'll be receiving more, but not that much more.

Indeed, the Social Security system is actually designed so that you get roughly the same total benefits no matter when you claim them -- assuming you live an average-length life.

When should you claim your benefits?

Those with a good chance of living a shorter-than-average life might come out ahead by claiming their benefits early. Various studies recommend delaying until age 70, though.

For example, a 2022 paper from the National Bureau of Economic Research offered this:

We find that virtually all American workers age 45 to 62 should wait beyond age 65 to collect. More than 90% should wait till age 70. Only 10.2% appear to do so. The median loss for this age group in the present value of household lifetime discretionary spending is $182,370.

Remember those COLAs, too. Even if you start with modest benefits, they'll keep up with inflation to some degree due to COLAs. But if you maximize your benefits, you'll also be maximizing your COLAs.

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