You can claim your Social Security benefits as early as age 62; but that doesn’t necessarily mean you should! There are in fact advantages associated with waiting until you reach full retirement age (FRA) to do so, including the (significant) fact that more money awaits if you do—with the amount growing about 7% for each year you wait until reaching your FRA (when you first become entitled to your full SS benefits). If you wait even longer, this rises to approximately 8% each year between your FRA and age 70.

Still, some circumstances do exist where it makes sense to claim your benefits early. In this post, we'll run through some of those reasons but also outline reasons to delay as well. Let’s start with situations ripe for the former…

You need the money

The most obvious reason you would claim your Social Security benefits early? You need the money, plain and simple.

If you're struggling to make ends meet, adding hundreds (or even a few thousand) dollars to your bank account on a monthly basis is a no-brainer. If you opt to go this route, know you aren’t alone; a recent Congressional Research Service study claimed that 30% of Social Security applicants are age 62.

Furthermore, it’s not uncommon to see a bump in the number of Americans claiming Social Security benefits at age 62 when economic times are tough; nearly 40% of eligible claimants cashed in their Social Security at this age during the 2008 recession, for example.

With the price of almost everything skyrocketing over the past few years, it’s no surprise that many people struggling to make ends meet are now choosing to claim their Social Security benefits as soon as possible.

You’re struggling with health issues

Once you're gone, the money will be too; you aren’t allowed to pass Social Security benefits on to your children. While death is of course never pleasant to ponder, it’s often advantageous for people in poor health who don't expect to reach a ripe old age to claim their Social Security benefits early.

The primary advantage of waiting as late as possible to claim, of course, is to receive more money; if you do so at age 62, you'll only see around 70% of the total amount you would receive if you waited until reaching your FRA. However, if you anticipate perhaps not being around to spend that money, it's best to claim at 62—even at the reduced rate.

You’ve left the workforce for good

Many people plan to work until their FRA (age 67, for those born on or after 1960) or even age 70 in order to maximize their Social Security benefits. While this is a good plan in theory, it’s important to remember that the best of plans don’t always come to fruition.

Given ever-looming threats to job security and stability, you may be involuntarily forced into retirement if your current employer lays you off and you cannot find replacement work. In this scenario, claiming SS benefits early can help cover everyday expenses in the absence of a salary.

Even if you're not laid off, you may decide that working until age 70 isn't a viable option (depending on the type of work you do). Perhaps it’s easy to say, "I'll work until I'm 70" when you're 55, but if you have a physically taxing job (e.g., manual labor), you may ultimately decide it's better to stop working altogether rather than risk an injury. While you'll need to accept reduced benefits in doing so, the ability to enjoy a relaxing retirement may offset this blow.

You’re ready for a new professional challenge

Not everyone wants to sit down and relax when they stop working. This cohort of people includes those yearning to start their own business, who now have the time they need to transform their dream into a reality in the absence of demands associated with everyday employment.

Many people in this position are mindful of risking their financial future, however, as even small businesses require significant capital to get off the ground; if you’re worried that investing your savings may leave you in a vulnerable position to meet your monthly expenses, claiming your SS benefits early can help allay these fears. You’ll of course need to accept the afore-mentioned reduction in the amount you’ll receive, but in this case, income from your new business can help make up for those losses.

If claiming Social Security early is the difference between living or letting go of your dream, it can certainly make sense to pursue this distinct opportunity.

You don’t trust the Social Security system

Some people claim their Social Security benefits early because they have doubts in the system's long-term viability given occasional news articles discussing impending bankruptcy or an inability to pay out everything owed.

While these rumors are not true as things currently stand, one can’t anticipate with any certainty which changes (if any) will occur in the future. With this in mind, some people decide to claim their benefits early—even at a reduced rate—rather than wait until later only to discover the system has buckled. A bird in the hand is worth two in the bush, as they say.

Other people doubt the system for an entirely different reason, believing they can invest the money owed to them better than the government can. Your Social Security fund will appreciate by 6–8% every year you leave it in the pot, but competent investors may think they can do better—even in the presence of risk.

You don’t want to use your own money

It’s improbable that Social Security benefits will serve as your only source of income during retirement; you'll likely have investments and personal savings, too. To many, it makes sense to claim SS benefits early rather than relying on savings to fund their lifestyle.

For example, let's say your monthly expenses total $3,000 and you receive $2,000 a month via your pension or RMD. The other $1,000 can come straight from your savings—or perhaps $800 from Social Security and $200 from savings. Many people decide it's better to put those government checks to good use rather than burn through their hard-earned savings in just a few years.

Reasons to delay Social Security benefits

Now that we’ve discussed why you might want to cash in your Social Security benefits early, let’s focus on why you shouldn’t. Though it’s of course tempting to immediately claim this money at your fingertips, it's usually best to delay this for as long as possible apart from one of the reasons outlined above—and even then, a well-informed decision is essential. Without further ado, here are the top reasons for doing so:

You’ll get more money
It’s much more logical to not touch your SS benefits early given a higher monthly benefit. Though you can withdraw at age 62, you’ll receive around 30% less than you would if you wait to reach your full retirement age. In this scenario, a benefit of $2,000 a month at your FRA shrinks to $1,400 any time before this. Missing out on that $600 just once would be painful, but remember this would in fact play out as an every-month occurrence; in choosing to wait, you could ultimately rack up hundreds of thousands of dollars more over your lifetime!

You’ll benefit from COLA adjustments
Cost-of-living adjustments (COLA) also impact your SS amount. In 2023, this increase stood at above 8%: meaning that a person who receives a full monthly Social Security benefit of $2,000 now has an additional $174 a month—which is extremely handy when the prices of everyday items increase. In 2024, Social Security beneficiaries are receiving a 3.2% increase.

In claiming SS benefits early, then, someone already receiving less per month would also see a lower cost-of-living adjustment as this is based on their monthly benefit amount—giving further credence to the fact that claiming benefits early leaves plenty of money on the table.

The bottom line: claiming Social Security benefits early

There are in fact plenty of reasons to claim your Social Security benefits early, but unless your circumstances match one or more of the precise scenarios discussed, it’s typically best to wait until you can claim the full amount. After all, retirement is expensive. Rather than leaving money on the table, aim to get as much as you can—and the aggregate sum you’re entitled to.

Still have questions about when to claim Social Security? Schedule a FREE Discovery call with one of our CFP® professionals.

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Vision Retirement is an independent registered advisor (RIA) firm headquartered in Ridgewood, New Jersey. Launched in 2006 to better help people prepare for retirement and feel more confident in their decision-making, our firm’s mission is to provide clients with clarity and guidance so they can enjoy a comfortable and stress-free retirement. To schedule a no-obligation consultation with one of our financial advisors, please click here.

Disclosures:
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  Prior to investing in a 529 Plan investors should consider whether the investor's or designated beneficiary's home state offers any state tax or other state benefits such as financial aid, scholarship funds, and protection from creditors that are only available for investments in such state's qualified tuition program. Withdrawals used for qualified expenses are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing.