Filing for Social Security at 62 Could Cost You Far More Than You Think -- Even If It Seems Tempting Now

After paying into Social Security your entire career, it's natural to want to claim those retirement benefits as soon as possible. And the earliest age you can do that is 62.

Not surprisingly, 62 tends to be a common age to file for Social Security. But claiming benefits at that age may cost you your financial stability not just in the near term, but in the long term.

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Social Security at 62: the financial hit

The most obvious cost of claiming Social Security at 62 is a permanently reduced monthly benefit.

If you file for Social Security at full retirement age, which is 67 for people born in 1960 or later, you'll get your monthly checks without a reduction. But if you file at 62 when full retirement age isn't until 67, your monthly checks will shrink by about 30%.

That's a pretty big reduction, especially if you expect Social Security to be your main (or only) source of retirement income. And even if it's not, you may still be giving up a lot of money over time.

Let's say you're entitled to $2,000 a month in Social Security at 67. If you file at 62, you lose $600 a month. Over the course of a year, that's $7,200 less.

But you may end up collecting Social Security for 30 years. That means forgoing $216,000 in lifetime benefits. And even that doesn't tell the whole story.

Social Security benefits are eligible for an annual cost-of-living adjustment (COLA). If you reduce your benefits, each COLA that comes through will be worth less. Over the course of a long life, you could end up losing out on a lot of money.

For example, let's say you lock in a $2,000 monthly benefit and get a 3% COLA. That's a $60 monthly boost. But with a $1,400 monthly benefit, a 3% COLA only puts an extra $42 in your pocket per month. Over time, that could add up, too.

Social Security at 62: the mental hit

You may be excited to start getting your Social Security checks sooner rather than later. But over time, smaller monthly benefits may not only mean less income -- they could also end up impacting your mental health.

As you age, whatever savings you've accumulated could dwindle. The more Social Security you have to make up for a shrinking nest egg, the more financially stable you might feel.

But if you reduce your Social Security benefits by claiming them early, as your nest egg starts to run out of funds, you won't have larger checks to compensate. That could put you in a precarious position later in life -- one that causes you to lose sleep.

Plus, you never know what expenses might arise as you age. As your home gets older, more repairs may be needed. You might eventually end up with higher healthcare bills. And there may also be a period when you need long-term care.

Smaller Social Security checks give you less leeway in the long run. And that strain could impact your mental health in a serious way.

Think carefully before claiming Social Security at 62

You can probably do the math and figure out how much money you stand to lose out on by claiming Social Security at 62 instead of waiting longer. But don't just think about that reduction on a monthly basis. Rather, consider the way smaller checks for life might impact your retirement on a whole.

You may come to the conclusion that your savings are strong enough to make up for smaller checks. Or you may decide that filing early is smart because you have health issues and don't expect a longer life. The point, though, is to consider all of the ways filing for Social Security at 62 might have an effect on your senior years.

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