Social Security at 62 vs. 70: The Decision That Changes Everything

Deciding when it's time to retire is a huge decision, which makes perfect sense. After all, we all have a set number of days, and deciding how to spend them can feel huge. Do you want to retire as soon as you're eligible to collect Social Security at 62, or wait until you're 70?

Choosing whether to file for Social Security benefits at 62 versus 70 is not a minor timing tweak. It permanently reshapes your monthly income and lifetime benefits. Everyone's situation is different, including yours. As you think about the right time to make a claim, you may want to consider the following.

Image source: Getty Images.

62 vs. 70

There are several reasons you might claim Social Security benefits at 62. For example, if you've never counted on it, you may have other financial plans in place and don't need a monthly Social Security check to get by. Or it could be that your spouse is scheduled to receive a large-enough check to offset your early claim.

Whether you're physically unwell and need to make an early claim or don't need the money because you have other sources of retirement income, here's what you can expect:

• Full retirement age (FRA) for most people born in 1960 or later is currently 67.
• Claiming benefits at 62 cuts your check by about 30% compared with FRA, meaning you receive roughly 70% of your full amount.
• Claiming benefits at 70 boosts your benefit to roughly 124% of your FRA amount, due to delayed retirement credits of 8% per year from age 67 to 70.

Let's say you're due to receive $2,000 per month at FRA. Claiming at 62 will reduce your monthly check to around $1,400. Claiming at 70 will increase your monthly check by about $480 to $2,480.

A couple more things worth considering

Once you make a claim, it's permanent unless you file a withdrawal of benefits. And withdrawing benefits isn't simple. Not only must the request be made within 12 months of your first payment, but you must also:

• Pay all the monthly payments you've received back to the Social Security Administration (SSA).
• Repay any benefits your spouse or children have collected.
• Reimburse the SSA for any money withheld from your payments, including Medicare premiums.

Income now or later?

Claiming at 62 brings in income sooner, which can help if you need income to cover basic expenses or if you experience health issues that may shorten your retirement years. Waiting until age 70 means you forgo up to eight years of Social Security payments, but you gain a much larger guaranteed check for as long as you live.

There's no single "right" claiming age. The best choice depends on your health, life expectancy, other income sources, and what you want for your life. The most practical approach is to:

• Use an online claim calculator -- along with your own earnings record and life-expectancy assumptions -- to compare age 62 with age 70.
• Carefully examine how each choice impacts your total projected lifetime benefits and how much you'll need to pull from your retirement savings.

Social Security at 62 vs. 70 is not just about receiving the greatest number of checks; it's a strategic decision that can reshape your retirement income for decades.

The Motley Fool has a disclosure policy.