I won’t even be eligible for Social Security for another thirty years, but I already know I want to claim it at age 70. This gives me the biggest checks possible, as delaying benefits increases your benefit a little each month until then. Since I’m quite healthy, I think waiting will also give me my greatest lifelong benefit. But this is not a choice I would recommend to everyone.
Filing at age 62 makes financial sense for many people, even though it can reduce their monthly checks by up to 30%. In fact, it’s a decision I would make for myself if one of three things happened.
1. My health deteriorated
I don’t have any major health problems at the moment, so I expect to live at least until my mid-80s. But if I had a terminal illness, I would probably change my claims strategy and file for Social Security as soon as possible. This would allow me to claim as many checks as possible before I passed away.
But it would depend on my financial situation at the time. If you claim social security early, you also reduce your spouse’s maximum survivor benefit. These are the monthly checks that Social Security provides to your family after you die. If I were financially reasonable, I might choose not to claim Social Security at all so that my husband could receive larger checks after I was gone.
2. I couldn’t pay my bills any other way
Since I was 20, I’ve been prioritizing retirement savings as much as possible, so I hope to have a savings pot big enough to cover all my expenses until I’m ready to claim Social Security at 70. But everything is possible.
If I were in financial trouble in my early 60s, I would probably start claiming Social Security at 62. This could reduce my lifetime benefit, but it would give me a better chance of maintaining my financial independence in the future. My checks would provide a steady source of income to supplement my personal savings so I didn’t have to go it alone.
But I would probably explore all my other options before making this choice. If I could still work, I might choose to stay in the job market for a while longer so that I could have a stable salary instead of claiming Social Security early. I could also see if I can make ends meet by just cutting back on my monthly expenses. But if that were impossible, I would have no problem filing for Social Security early.
3. Claiming early can maximize my family benefits
With decades left in the job market and the future of Social Security uncertain, it is difficult to know what kind of benefits my husband and I could receive from Social Security. We’re both dually eligible: we’ve worked long enough to claim retirement benefits ourselves, and we’re also eligible for spousal benefits on each other’s work record. But the Social Security Administration will only give us the higher of the two.
At this point, I expect we will all claim our own retirement benefits. So I think delaying Social Security until age 70 will maximize our family benefits.
But if my Social Security benefit for my spouse were much higher than my retirement benefit, I would be more tempted to file early. My checks could provide us with a small monthly income, while my husband postponed it so he could get a larger monthly benefit. When he subsequently applied, the Social Security Administration switched me to my spousal benefit.
Because so much is still uncertain, all I can do is choose a claiming age that I think makes the most sense for me at the moment, and adjust it as my circumstances change. I review my retirement plan at least annually, and so far I believe I’m on track to claim at age 70. But I will never rule out that I have filed a claim before. In the situations I outlined above, this is really the best choice.
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3 Reasons Why I Would Absolutely Claim Social Security at 62 was originally published by The Motley Fool
