Every year, millions of Americans make the same decision when it comes to Social Security—they file for benefits at age 62. It is the earliest age you can claim those monthly checks. On the surface, getting that money sooner sounds like a win. But what seems like a smart move may actually backfire for many retirees.
Let us break down why this strategy can be risky and what you need to think about before locking in your decision.
Why so many retirees file for Social Security at 62
Filing at 62 is tempting. After all, it means money in your pocket right away. And if you need it to cover bills or health expenses, it might feel like your best option.
But here is what you may not realize:
- Filing early comes with a permanent cut in your monthly benefit
- You will get about 30% less per month compared to waiting until full retirement age
- That lower payment lasts for the rest of your life
So while you are collecting checks earlier, you are also locking in a smaller amount every single month.
What is the risk of claiming benefits too early
Here is the thing—many Americans are retiring with far less in savings than they need. According to the Federal Reserve, the median retirement savings for people aged 65 to 74 is just $200,000. That may sound like a lot, but spread over 20 or 30 years, it is not much.
- If your nest egg is small, you will likely rely more heavily on Social Security
- The smaller monthly benefit from filing at 62 might not be enough to keep up with expenses
- As prices rise over time, that smaller check may stretch even less
This is why early filing can backfire. It may seem helpful now, but it can make things harder later.
How longevity can change your total lifetime income
One of the biggest unknowns in retirement is how long you will live. That is where the early filing strategy can get tricky.
- If you live a shorter life, filing early may give you more in total
- But if you live into your 80s or 90s, delaying benefits could pay off with a higher total payout
- The longer you live, the more your smaller checks add up to a loss
People who are in good health or have family members who lived long lives may want to think twice before signing up early.
When is it actually smart to file at 62
Filing early is not always bad. In some cases, it can make sense:
- If you have serious health issues and do not expect to live long
- If you truly need the money now and have no other income sources
- If you plan to invest the money wisely and earn more than the benefit you are giving up
But for many, the peace of mind that comes with a bigger check later in life is worth the wait.
