The post Should You Claim Social Security at 62? appeared first on Dividend Power.

My conversations with people about Social Security often start with someone confidently saying, “I’m taking Social Security at 62.” Their reasons are usually the same: ‘Social Security will run out of money,’ or ‘The earlier, the better.’ Even financial gurus like Dave Ramsey encourage claiming benefits as soon as possible. 

But before you rush to apply for Social Security at 62, it’s worth considering more than just the amount you’ll receive. There’s a deeper conversation to have about health, relationships, financial flexibility, and what truly matters in your life. 

Why Social Security Timing Matters

Think of Social Security timing like a pie. If you start eating your pie at 62, you can savor it now, but there will be smaller slices, but more over time. If you wait until Full Retirement Age (FRA), usually 66 or 67, your slices will be fewer but more significant. And if you hold off until 70, those slices will be even larger, but you will have to wait to enjoy it. To put it another way, claiming benefits at 62 is like your kid sneaking into the kitchen and stealing 30% of each slice before you even realize it. 

But stepping away from my silly example, numbers are often the only thing people focus on. What if the best time to enjoy your pie is now, while you’re healthy and can savor it? Or what if waiting allows you to enjoy a bigger slice with the ones you love? Ultimately, it’s not about whether your slice of pie is big or small—it’s about making sure it allows you to live your best life.  

Factor #1: Your Physical Health

Health can be unpredictable. One day, my grandma was walking around, active and independent. Then, after a fall, she was a wheelchair user until she passed away. When financial advisors discuss Social Security, they often focus on the chances of living longer than average. For example, delaying Social Security might seem like the best move if your parents lived to be 100. But there’s more to health than just lifespan.  

Let’s go back to the pie example again. There’s a common misconception that if you take your slice early, you will end up with crumbs later. In actuality, if you live longer, the total amount of slices you eat might be the same, whether you start slicing at 62 or wait until 70. This is called the break-even point, where the total amount of payments evens out, often occurring in your late 70s to early 80s. If you live past the break-even point, you can enjoy the slices longer. But starting earlier would be better if health issues limit your life span.  

Factor #2: Your Mental Health

My uncle had one more year to collect his full pension and Social Security benefits. However, that last year of hard work turned into a painful setback when chronic illnesses crushed his opportunity to enjoy a fulfilling retirement.

Mental health challenges and chronic illnesses often get overlooked, even though they can affect your ability to enjoy those extra years or work longer to delay benefits. Sometimes, having Social Security as a supplement to early retirement can offer more than just financial safety; it can be the key to less stress, fewer workplace conflicts, and more freedom. Stepping away from the grind of a full-time job might allow you to live more fully, with time to focus on things that matter. In many cases, a less stressful, more enjoyable lifestyle can reduce long-term health costs, saving you money in the long run. 

Factor #3: Family Impact

Deciding on Social Security timing isn’t just about you—it’s about the people who rely on you. For example, if you delay claiming Social Security, your surviving spouse may be eligible for a larger monthly check after you’re gone. Or, claiming early could mean leaving behind a smaller safety net—something to consider if it’s your spouse’s primary income source. 

Deciding to receive Social Security at 62 goes beyond dollars and cents. Social Security timing can also shape the dynamics of care. For example, receiving Social Security might allow you to care for aging parents, saving your family (or you) from expensive long-term care expenses. It can also free up time to spend with your grandchildren, creating memories and giving their parents free babysitting. Ultimately, receiving benefits is more than a personal decision; your decision will also affect those closest to you.  

Factor #4: Financial Flexibility

Social Security is a significant piece of your retirement income puzzle. If Social Security consumes only a slice of your retirement income pie, you might have the flexibility to delay benefits, have an early retirement, and experience less financial strain. For others, Social Security consumes the majority of their pie.

Understanding your financial circumstances is key to making an informed decision about Social Security. Utilize online tools and Social Security resources to help you, including calculators, to estimate benefits and create a break-even analysis. Working with a financial advisor can add more insight, allowing you to simulate different scenarios, consider taxes and inflation, and make a plan that aligns with your goals. 

Your Self-Assessment Guide: Questions to Help You Decide

Deciding when to claim Social Security doesn’t have to feel overwhelming. Here’s a set of questions based on the blog sections to help you reflect and make the best Social Security decision for you: 

So, should you claim Social Security at 62? The truthful answer is it depends. Social Security timing isn’t one-size-fits-all—it’s a personal choice that depends on your health, family, financial flexibility, and values. At the end of the day, the right decision is the one that supports the life you want to live. 

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The post Should You Claim Social Security at 62? appeared first on Dividend Power.