Thinking of Claiming Social Security at 62? Ask These Crucial Questions First

On a recent trip, my husband and I got to talking with a couple who were within a year of retiring. They shared plans to abandon their high-cost suburb and move to a more remote part of the country, and we got a little jealous.

At one point, the topic of Social Security came up, and the couple informed us that part of their ability to retire in the coming year hinged on being able to claim benefits at 62. That happens to be the earliest age to sign up for Social Security, and it means reducing benefits substantially compared to waiting until full retirement age (which, for this couple, would be 67).

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When we parted ways, my husband turned to me and asked if I thought the couple was making a mistake by planning to claim Social Security so early. I told him not at all.

You'll often read that filing for Social Security at 62 is a huge no-no because it means accepting smaller benefits each month for life. But I don't necessarily think it's a poor choice, provided you've asked the right questions first. Here are two I recommend running through.

1. What will reduced benefits mean for my retirement income?

There are many retired Americans today who get all or most of their income from Social Security. People in that situation may not be able to afford an early Social Security claim and the reduced benefits that come with it.

However, there are also people who find themselves with a few million dollars saved as retirement approaches. People like this aren't necessarily high earners. Often, it's folks who have committed to saving money for retirement every month over a long period of time.

That's the impression I got from the couple we met on our trip. They seemed like modest people who prioritized retirement savings and had accumulated a nice nest egg by their early 60s as a result.

I also think that this couple will be getting most of their retirement income from their savings, with Social Security serving as a supplement. For many retirees, it's the other way around.

As a result, they can probably afford a hit to their Social Security benefits without struggling financially. If the same holds true for you, then claiming Social Security at 62 may not be a bad idea.

To put it another way, let's say you expect to need $7,500 a month in retirement to live comfortably, and your savings can provide $6,000 easily. If claiming Social Security at 62 reduces a monthly benefit of $2,150 at full retirement age to about $1,500, there's not necessarily a problem. You just have to do the math first to make sure.

2. Can an early claim do something meaningful for me?

Some people claim Social Security early because they're convinced the program is running out of money. I'd say that's a pretty bad reason to file for benefits at 62. However, if you have a good reason to sign up early, that's a different story.

The couple we met said point blank that filing for Social Security at 62 should allow them to retire a few years earlier than most of their peers. They plan to spend that time settling into their new location and taking local trips. They want to enjoy certain activities together while their health is strong, and taking benefits early could make that possible.

So I'd call that a good reason to file for Social Security at 62. And if you have a good reason of your own and can afford to sign up early, then who's to say that you shouldn't?

Claiming Social Security at 62 is not always a smart idea. If those benefits will be your main or only source of retirement income, I'd encourage you to think carefully before locking in a massive reduction. But don't assume that filing at 62 is unwise. Just ask these key questions to make sure it's a smart move for you specifically.

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