Full Social Security payments can be claimed when a person reaches “full retirement age” (FRA), usually sixty-six or sixty-seven depending on one’s birth year.
Social Security payments are intended to replace roughly forty percent of a person’s pre-retirement income. For some Americans, this number is enough; for others, it is not enough. The program also allows people to delay taking their benefits, for a bonus—or, conversely, to take them early, for a penalty.
The earliest possible age at which a person can claim their Social Security benefits is sixty-two. Filing for benefits at this age will result in a penalty of roughly thirty percent, substantially decreasing one’s monthly checks and usually making it difficult to live without another source of income, such as a nest egg. Most financial planners strongly advise against doing this; over the long run, it is usually more economical to wait until FRA age to claim the payments.
With that said, there are two good reasons to file for Social Security payments early.
You Still Might Still Make More Money
Statistically, most people are not likely to make more money by filing for their benefits early. However, if there is some reason that a person would not expect to live a full life, such as a debilitating or serious illness, it might be better to claim the benefits early and receive as much as possible in the short run.
Even for Americans without a good reason not to expect a full life, accidents happen, meaning that filing for benefits early can sometimes be the safe choice.
You Can Enjoy Early Retirement
Statistically, most people who claim their benefits early are likely to not make as much money from Social Security over the long run. However, money is not all that matters in life. Many Americans work unsatisfying jobs, particularly physical ones that are more difficult to perform well as they age. For these people, early retirement from work is a tempting option, and a Social Security check at sixty-two, even a relatively small one, is one way to leave work early and provide for oneself in retirement.
Retiring early and relying on a small Social Security check can lead to its own complications, such as how to pay for retirement without any savings. But for many people, a few extra years’ time to relax and enjoy retirement could be worth far more than the money saved by continuing to work. As they say, you can’t take it with you.
Trevor Filseth is a current and foreign affairs writer for the National Interest.