Claiming Early or Claiming Late: Which Is the Bigger Social Security Timing Mistake?

If you look for arguments to support claiming Social Security at 62, you'll find them. The same goes for delaying Social Security until you qualify for your largest benefit at 70. This can leave you pretty confused when deciding when to sign up.

The truth is, early and late claiming each have their own pros and cons. The right choice for you depends on what trade-offs you're willing to make. Here's a closer look at what happens when you claim early versus claiming late.

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What happens when you claim Social Security early

Claiming Social Security early means applying for benefits before your full retirement age (FRA). This is 67 for most people. Many early claimants choose to apply as early as 62, so they can receive the most checks possible. This might also lead to the largest lifetime benefit if you have a short life expectancy. But there are drawbacks to claiming early, too.

The earlier you apply, the smaller your monthly checks will be. Those who sign up right away at 62 get 30% less than those who wait until their FRA to sign up.

If you have an average or above-average life expectancy, you might receive a smaller lifetime benefit by claiming early. You could also reduce the survivor benefits your family members are entitled to after you pass away.

Early claimers who are still working are at risk of losing money to the Social Security earnings test. This money isn't permanently lost. You'll get a benefit boost once you reach your FRA. But in the meantime, you may have to rely more upon personal savings or your income from your job to make ends meet.

What happens when you claim Social Security late

Claiming Social Security late means applying for benefits after your FRA. The pros and cons of late claiming are the opposite of early claiming. Late claimers get larger monthly benefits. You'd get 24% more by waiting until age 70 to sign up than you would by claiming at your FRA of 67. Many late claimers also get larger lifetime benefits and leave behind larger survivor benefits for their family after they pass away.

But life expectancy comes into play here. If you only live into your mid-70s, you'll likely wind up with a smaller lifetime benefit by claiming late than you could have gotten if you'd applied early. If you plan to claim at 70 and die before that, you might not get any money from the program.

Claiming at 70 also forces you to rely more upon your personal savings or a job to cover your expenses until you're ready to sign up. This might not be ideal if you don't have much retirement savings or were hoping to quit the workforce sooner.

The reality is, claiming Social Security late isn't better or worse than claiming early. It depends on which set of drawbacks you're more willing to accommodate. It's also fine to change your mind if your finances or life expectancy change down the road. Just make sure you review these pros and cons so you understand what you're choosing.

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