Here’s when claiming Social Security at 62 could backfire on you – About Your Online Magazine


When it comes to signing up for Social Security, you have options. You can archive in full retirement age, or FRA, which is 66, 67, or something in between, depending on your year of birth, and receive the full monthly benefit you are entitled to based on your earnings story. Or you can delay your application for FRA approval and get an 8% increase in your benefits for each year you postpone until you are 70 years old.

You can also apply for Social Security before the FRA – specifically, at the age of 62. It is not surprising that 62 was the most popular age for enrolling in benefits, as it gives the elderly their money as quickly as possible. But there is a downside to filing an order for 62 – you will get a much lower monthly benefit for life.

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Now, the exact arrangement that your benefit will have will depend on your FRA, but if you were born in 1960 or later, for example, and your FRA is 67, then you will permanently reduce your benefits by 30%, claiming at 62 . For some seniors, this scam is worth it, especially if it allows them to retire early. But before you rush to claim Social Security at age 62, consider that you could end up living much longer than you expected – and that filing a claim early in this situation is a bad idea.

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When waiting for Social Security pays off

If you don’t expect to live a very long life, filing a Social Security application at age 62 can be beneficial for you. But if you end up living a longer life, so claiming it at age 62 can hurt you financially in several ways.

First, you may receive a lower lifetime Social Security benefit if you file the claim at age 62. Say your FRA is 67 and you live to be 97, and you are entitled to $ 1,500 per month in the FRA. If you file the lawsuit with the FRA, you will be left with a total of $ 540,000. If you apply at the age of 62, you will only receive a lifetime total of $ 441,000.

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But that is not all. The longer you live, the more you risk running out of retirement savings in your life. And when that money runs out, you can depend even more on Social Security. At that point, can you really afford to receive a lower monthly benefit if it is practically your only source of income? Probably not.

That is why claiming Social Security at age 62 is not always the best idea. Although there is no way to predict how long you will live, if you have no reason to believe that you will die at a young age, waiting until the FRA or even later may be a more intelligent move.

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Don’t make a decision you will regret

To be clear, there are many scenarios in which applying for Social Security at age 62 makes sense. If you can’t continue to work, for example, and need to retire at age 62, claiming benefits is much better than accumulating debt just to cover your living expenses. And if you have saved very well for retirement and can easily cover many decades of living costs with your IRA or 401 (k) plan, then you may want to apply for benefits soon and use that money to travel while you are relatively young.

The key, therefore, is to think carefully before signing up for benefits. Filing at 62 may work well for you – but be aware that you may regret your decision if you end up leading a longer life than you anticipated.

Paula Fonseca