Most people are drawn to the idea of claiming Social Security as soon as they hit 62, and there’s a straightforward reason for it. By starting early, you receive more checks over time. However, this approach can trim your monthly benefits by as much as 30%.
This doesn’t automatically make it a poor choice, but it’s vital to weigh this factor carefully when deciding the timing of your benefits. Let’s take a deeper dive into how the benefits at age 62 compare with those at older claiming ages.
Examining the Average Social Security Benefit at 62
As of 2023, the typical Social Security check amounted to $1,905.31 each month. Thanks to cost-of-living adjustments (COLAs), that figure is on the rise. Come 2024, with a 3.2% increase, the average benefit bumps up to $1,966.28. By 2025, with another planned 2.5% hike, this average is estimated to hit approximately $2,015.44.
However, those opting to start benefits at 62 end up with considerably less. Their monthly benefit in 2023 was just $1,298.26. Taking into account the 2024 COLA, this amount is adjusted to $1,339.80, and by 2025, it will likely reach around $1,373.30.
It’s interesting to note that average benefits gradually increase with age. Those in the age bracket from 70 to 74 enjoyed the highest average benefit — $2,021.81 in 2023, projected to rise to $2,086.51 in 2024, and $2,138.67 in 2025.
This trend aligns with how the government structures Social Security benefits. You’re entitled to your full benefits upon reaching your full retirement age (FRA), which falls between 66 and 67 for most of today’s workers. Early claims shrink the monthly check, whereas deferring raises it. The longer you delay applying, the steeper the increase, as detailed in the accompanying table:
Benefits Increase Rates:
- FRA of 66 vs. FRA of 67
- 5/12 of 1% per month (5% per year) from 62 to 63, or from 62 to 64
- 5/9 of 1% per month (6.67% per year) from 63 to 66, or from 64 to 67
- 2/3 of 1% per month (8% per year) from 66 to 70, or from 67 to 70
Delaying until age 70 ensures the maximum Social Security check. However, this strategy has its downsides. You’ll collect fewer checks overall, which might not appeal to everyone, especially those preferring smaller, more frequent payments.
Considering a Social Security Claim at 62
A few critical factors should influence whether you should claim Social Security at 62 or wait longer. Your health is crucial here. If you don’t anticipate a lengthy life span, deferring might not be beneficial.
In such situations, starting benefits early could be wise, allowing you to gather as many payments as possible. But note that claiming early locks in a reduced survivors’ benefit for your spouse and dependents after your passing. If you don’t immediately need the funds, holding off could be the smarter move.
Another scenario where early claiming makes sense is a lack of sufficient retirement income from other sources. If postponing benefits means dipping into debt, taking them early becomes a pragmatic choice.
For married couples, especially those with significant income differences, it might benefit the lower earner to start collecting at 62. This can allow the higher-earning spouse to delay claiming until entitled to larger benefits. Eventually, the spouse who started early can switch to a spousal benefit if it proves more substantial.
Mapping out when you intend to claim Social Security, whether at 62 or later, can guide your personal retirement savings strategy. Remember, your decision isn’t set in stone. Revisit and revise your plan regularly to stay on track for your desired retirement.
