Social Security benefits can be claimed once you turn 62. Since this money from the government can provide an important source of financial support, it might seem like a good idea to start getting payments right away.
In reality, though, there are plenty of downsides to starting benefits as soon as they become available. The significant disadvantages of claiming Social Security at 62 have convinced me it's not something I'll ever do.
There are three important reasons why such an early claim makes no sense for me -- and for many others either. Here's what they are.
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1. I don't want to reduce my benefits by retiring early
The biggest reason why I'd never want to claim Social Security at 62 is because I know that doing so would reduce my monthly retirement checks for the rest of my life.
See, like most future retirees, my full retirement age (FRA) is 67. FRA is based on birth year. It's 67 for anyone born in 1960 or later. In order to get your full standard benefit, you can't start getting payments before FRA. Any month that you claim early will reduce your checks by 5/9 of 1% for the first 36 months and by 5/12 of 1% for each month before that.
Claiming at 62 with an FRA of 67 would lead to a 30% reduction in monthly Social Security income. I don't want to accept so much less money, especially since these retirement checks are going to be my only source of guaranteed lifetime income protected against inflation. Of course, I'll have savings, but that doesn't have these protections built in.
Rather than starting early and reducing my check, I hope to wait until 70 so I can actually increase my standard benefit the maximum amount possible by earning delayed retirement credits. These increase payments by 2/3 of 1% per month for each month that no Social Security benefit is paid after FRA and before 70.
If you want to maximize your own Social Security checks, you'll also want to say no to claiming at 62.
2. I want to keep working, so claiming benefits makes no sense
There's another reason I'm not planning to start checks at 62. I don't want to give up working. I actually like my job, and it's a pretty flexible one, so I plan to keep working well into my 60s and, ideally, until I turn 70.
Now, it's true that you can work while on Social Security. However, if you work and get benefits at the same time and you haven't reached full retirement age yet, then benefits are reduced if your earnings exceed a certain threshold. That limit is pretty low. In 2024, you lose $1 from your benefit payment for every $2 earned above $22,320 if you don't hit FRA at any point during the year. Eventually, this is credited back, but that happens over time after you hit your FRA.
It's very likely I'll be making more than that if everything goes according to plan, so there's no reason to claim benefits just to have them disappear due to these work rules. If you also plan to keep working, then an early benefits claim may not make sense for you for the same reason.
The good news is, once you have reached FRA, you can work and earn as much as you want without benefits being impacted. So, if I decide to stick it out and keep working into my late 70s, I can double dip.
3. A claim at 62 reduces the chances of maximizing lifetime benefits
Finally, there's one more reason I'd never claim Social Security at 62. I want to have the best possible chance at maximizing my lifetime Social Security benefits after all the money I've paid in over the years. And studies have shown that the vast majority of retirees would end up better off if they waited until 70 to start checks. So, that's my goal.
If you also want to maximize your own lifetime income from Social Security, waiting as long as you can is usually going to be your best bet. So, like me, you may want to consider swearing off a claim at 62 and making plans to try to delay as long as possible before your checks start coming in.
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