Seniors are often advised to think carefully about when to claim Social Security. And the reason is that your filing age will impact the amount of money you receive from the program each month.
You’re allowed to sign up for Social Security starting at age 62. But you won’t get your complete monthly benefit based on your personal earnings history unless you wait for full retirement age (FRA) to file. FRA is either 66, 67, or somewhere in between, depending on the year you were born.
You’ll often hear that claiming Social Security at 62 is a dangerous move since it means slashing your monthly benefit for life in a serious way. For context, if your FRA is 67, filing at 62 will mean taking a 30% hit to your monthly income.
But there’s one situation in which claiming benefits at 62 absolutely makes sense. And if it applies to you, you shouldn’t feel bad about reducing your benefits in the process.
When you want — and deserve — to meet your goals
Health can be a tricky and unpredictable thing. You could be in perfectly good shape at one point in life only to get injured or experience an illness that changes your picture from then on.
That’s why you may want to consider filing for Social Security at age 62. If you’re in good health at that point and have goals you want to achieve that depend on good health, then waiting to sign up for benefits could be problematic if your health takes a turn for the worse.
Let’s say you’ve always wanted to hike throughout Europe. You may need extra money, such as your Social Security benefits, to pull off a trip like that.
If, come age 62, you’re in good enough shape to embark on that journey, you may want to file for Social Security and go for it. If you wait longer to grow your monthly benefits, who knows whether you’ll be in a position to take that trip a few years down the line?
Of course, the one caveat here is that you’ll need to be approaching your filing decision with a decent financial cushion. If you have no savings, no pension, and no assets you can tap in retirement, then this advice frankly isn’t for you. As much as you deserve to fulfill your lifelong goals, you also need to be able to eat and put a roof over your head. A reduced Social Security benefit might make that difficult.
Rather, this advice assumes you’re in a decent financial position without Social Security — that you either have a generous employer pension, a robust nest egg, or another asset that could make it so you can live comfortably. But if that’s the case, there’s nothing wrong with chasing your goals, even if it means getting less money every month from Social Security going forward.
You only live once
Many people put off big goals until retirement because they don’t have the time or money to tackle them earlier in life. Come retirement, you might have the time to meet your goals. And Social Security could provide you with the money.
So, if you’re OK financially, it could make absolute sense to claim Social Security at 62 and attack your goals while your health makes it possible. A higher Social Security benefit might do some good things for your finances. But you don’t want to spend your retirement feeling bad about the things you never got to do because you waited too long and your health stopped cooperating.
Read More: The No. 1 Reason to Claim Social Security at Age 62