Social Security at 62? Here's Why It's Not Such a Bad Idea After All

Key Points

• Age 62 is the earliest a person can file for Social Security.

• Claiming benefits at that point will reduce them substantially for life.

• That doesn't mean filing at 62 is automatically a poor choice.

• The $23,760 Social Security bonus most retirees completely overlook ›

Once you retire, you may have a few different income streams at your disposal. Ideally, at least one of those will be personal savings you've amassed in an IRA, 401(k), or similar retirement account.

But chances are, Social Security will end up being one of your most significant income streams once you retire. And because of that, you'll often hear that it's important to do what you can to maximize your benefits.

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For some people, that could mean delaying Social Security as long as possible. And you'll often hear that filing for Social Security at 62 is one of the biggest financial mistakes you can make.

It's true that claiming Social Security at 62 is a poor choice for some people. But is it wrong for you? Not necessarily.

Consider the advantages

Social Security's full retirement age for people born in 1960 or later is 67. If you claim benefits at 62, you'll reduce those monthly payments by about 30% on a permanent basis.

Despite that unquestionably large hit, filing for Social Security at 62 is not guaranteed to be a poor choice for you. For one thing, it could potentially address an immediate need for money.

If you're laid off from your job at 62 and can't get rehired, claiming Social Security could make it possible to pay your bills without racking up costly debt. And if health issues force you to retire sooner than you'd like, Social Security could help you avoid raiding your 401(k) or IRA too extensively and depleting that money prematurely. You may be able to take minimal withdrawals, or leave your savings alone completely, if you have Social Security coming in.

But even if you're able to stop working on your own timeline, claiming Social Security at 62 could still make sense from a longevity standpoint. You'll lose out on lifetime income by claiming Social Security at 62 if you end up living well into your 90s. But if you only end up living into your 70s, then you might end up with more total income from Social Security by filing for benefits as early as possible.

Also consider that your health may be more optimal in your early 60s than later on. If you've worked hard your entire life with the goal of retiring early and being able to travel, claiming Social Security at 62 could be your ticket to pulling that dream off. And if you have enough savings to cover your essential costs without Social Security, then an early claim may not hurt you financially in the long run.

It pays to keep an open mind

It's easy to see why you might write off Social Security at 62 as a poor choice. After all, you're guaranteed to get less money on a monthly basis.

But before you dismiss the idea, think about the upside of getting your monthly benefits as soon as possible. You may find that age 62 is actually the perfect time to claim Social Security, depending on your personal circumstances and goals.

That said, claiming Social Security at 62 is not a good idea for everyone, and it's important to recognize that. If you don't have a lot of retirement savings to fall back on, you might need larger monthly benefits to ensure that you're able to keep up with your costs. And if you have reason to believe you'll make it to age 100, then that's another good reason to file for Social Security at a later age than 62.

The key, rather, is to be open-minded about claiming Social Security at 62 rather than assume off the bat that it's a bad idea.

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