In the first five months of 2025, Social Security retirement benefits applications surged by nearly 18% compared with the same period in the previous year. This notable rise in early claims has elicited concern amongst some financial advisors, primarily because individuals who claim benefits at 62 receive approximately 30% lower monthly payments than those who wait until the typical age of 67.
Nevertheless, the decision regarding when to begin collecting Social Security benefits remains highly personalized. Diverse circumstances influence this choice. Four significant advantages characterize claiming benefits at age 62, which are outlined below.
Immediate Access to Financial Resources
For individuals who face unemployment or underemployment, initiating Social Security benefits at 62 can provide critical financial support. Those unable to secure full-time employment or only able to obtain part-time positions with limited income may find that early benefit payments help bridge income gaps. The availability of benefits without the necessity of waiting aligns with the immediate monetary needs encountered by many in this situation.
Potentially Maximizing Total Lifetime Benefits Based on Individual Circumstances
While postponing Social Security benefits until age 70 is commonly advocated as a method for maximizing monthly payments and overall lifetime benefits, this strategy is not universally optimal. For persons with serious health concerns or a family history indicating a potentially shorter lifespan, opting to claim benefits at 62 can increase the likelihood of receiving more cumulative benefits overall.
The break-even age when total benefits received from waiting until 67 surpass the benefits accrued from claiming at 62 is approximately 11 years and 8 months after initial claiming. In scenarios where an individual expects not to live beyond 74 years of age, collecting benefits early may be the financially prudent decision.
Opportunity to Prioritize Personal Well-being
Employment conditions for those between ages 50 and 70 frequently involve substantial physical demands or intense workplace stress. Data from the Economic Policy Institute reports that about 50.3% of workers in this age group are employed in physically taxing jobs, and 46.1% hold positions with high-pressure responsibilities.
Individuals experiencing physical or mental health challenges might benefit from retiring and activating Social Security benefits at 62 to devote time and resources to their health. However, it's important to recognize that Medicare eligibility begins at 65, so receiving early benefits necessitates securing alternative health insurance coverage for the interim period.
Facilitating Access to Spousal Benefits
Another consideration is that a spouse's entitlement to Social Security spousal benefits is contingent upon the primary beneficiary’s claim status. If one spouse initiates benefits at 62, the other spouse becomes eligible to claim spousal benefits based on that entitlement. Early claiming, therefore, can unlock additional income streams for couples relying on Social Security distributions.
In conclusion, the optimal time to begin collecting Social Security varies according to individual financial needs, health status, family considerations, and job situation. While the reduction in monthly benefits for early claimants is substantial, the potential advantages described highlight why some individuals elect to initiate benefits at 62. Ultimately, the decision should align with the unique circumstances and priorities of each retiree.