Planning to Claim Social Security at 62? Here Are 3 Critical Questions to Ask Yourself First

When you sit down to plan for retirement, one of the things you’ll need to do is figure out when to claim Social Security. And the good news is that you have plenty of options.

Once you turn 62, you can claim benefits at any time. If you want to ensure that those benefits are not reduced, you’ll have to wait until full retirement age to file, which is 67 if you were born in 1960 or later.

You can also delay your Social Security claim past full retirement age for boosted benefits. Each year you hold off until your 70th birthday gives your benefits a guaranteed 8% increase for life.

Claiming Social Security at 62 can be tempting because it means getting your money as early as possible. But it also means accepting smaller checks. So before you move forward with a claim at 62, make sure to address these important questions.

1. What are my annual spending needs?

You might assume that once you retire, your annual income needs will drop substantially. But once you sit down to create a budget, you may realize that’s not actually the case.

While certain costs of yours may drop in retirement due to not having to go to an office on a regular basis, many of your core expenses are likely to stay the same. Some, like healthcare and entertainment, might even increase.

It’s important to get a solid handle on your estimated spending to see whether you can afford to take a hit on your Social Security benefits by filing early. And don’t forget to account for one-off expenses, like home repairs that might arise out of the blue or annual car insurance payments. A detailed budget could help you arrive at the right choice.

2. How much income outside of Social Security can I count on?

Ideally, Social Security won’t be your only available source of income in retirement. Once you’ve identified your annual spending needs, see how much income you can expect outside of those benefits.

Let’s say you expect to safely withdraw $30,000 a year from your retirement savings and anticipate another $5,000 a year in interest income. If your annual spending needs are $60,000, you’ll need $25,000 from Social Security. If filing for benefits at 62 won’t leave you with $25,000 annually, you’ll know that signing up then is a mistake — especially if waiting until full retirement age lets you easily meet your income goals.

3. How long do I expect to live?

It’s not necessarily so difficult to sit down and create a retirement budget. It’s also not that hard to estimate your annual non-Social Security income.

Figuring out how long you expect to live is a lot trickier. In fact, it’s downright impossible. But you can use your health and family history to make an educated guess.

Here’s why that’s important. If you believe you’re likely to live a longer life, claiming Social Security at 62 may not just reduce your benefits on a monthly basis. It could also leave you with less Social Security over your lifetime.

On the flip side, if you’re not sure whether filing at 62 is the right choice but have health problems and don’t expect to live a long life, you may end up with more Social Security in total if you take benefits early rather than wait. So it’s definitely crucial to factor in your health and your parents’ lifespans.

Some people might tell you that claiming Social Security at 62 is a dangerous move. The reality is that it could be, but that’s not a given. The key is to figure out how an early claim might impact your ability to cover your costs, and whether it’s likely to lead to a smaller lifetime benefit. Only once you’ve addressed these factors can you make an informed decision.