Here’s How Claiming Social Security at Age 62 Could Be a Brilliant Move

Patience pays off in most cases. That’s true with collecting Social Security retirement benefits. The longer you wait (at least until age 70), the more you make.

That’s why most financial advisors will recommend that you hold off until your full retirement age (FRA) or longer to begin receiving Social Security benefits. That’s good advice for many people. However, I’m going to go against the conventional wisdom. Here’s how claiming Social Security at age 62 could be a brilliant move.

“Could” is the operative word

Let me first stress that “could” is the operative word in my contention. There’s no question that your monthly retirement benefit from Social Security will be higher if you wait until you’re well older than age 62 to file.

For every month you collect Social Security benefits during the 36 months before reaching your FRA, you’ll be penalized five-ninths of 1%. If you begin receiving benefits even earlier, you’ll be penalized five-twelfths of 1%.

If your primary source of retirement income is Social Security, collecting benefits at age 62 definitely won’t be a brilliant move from a financial standpoint. Even if you have other sources of income during your retirement years, receiving benefits at the earliest age possible still might not be wise.

A negative scenario for when Social Security at 62 could be best for you

However, there are at least two scenarios where claiming Social Security retirement benefits at 62 could be best for you. And they’re at extreme ends of the scale.

The negative scenario is when you have good reason to expect that you won’t live past your late 70s. If your FRA is 67 (which is the case for anyone born in 1960 or later), you’ll need to reach around age 78 and eight months for your cumulative retirement benefits from holding off until age 67 to top the cumulative amount received by collecting benefits at age 62.

Of course, there’s a possibility that you’ll live longer than you expect. If you’re alive and kicking…