Here's When Claiming Social Security at 62 Could Backfire on You
When it comes to signing up for Social Security, you have options. You can file at full retirement age, or FRA, which is either 66, 67, or somewhere in between, depending on your year of birth, and collect the full monthly benefit you're entitled to based on your earnings history. Or, you could delay your filing past FRA and score an 8% boost to your benefits for each year you hold off, up until the age of 70.
You can also file for Social Security ahead of FRA -- specifically, as early as age 62. Not surprisingly, 62 has long been the most popular age to sign up for benefits, since it gets seniors their money the soonest. But there's a downside to filing at 62 -- you'll lock in a much lower monthly benefit for life.
Now, the exact hit your benefit will take will depend on your FRA, but if you were born in 1960 or later, for example, and your FRA is 67, then you'll shrink your benefits by 30% on a permanent basis by claiming them at 62. For some seniors, that hit is worth it, especially if it allows them to retire early. But before you rush to claim Social Security at 62, consider that you may end up living a lot longer than you'd expect -- and that filing early in that situation is a very bad idea.
Source Fool.com
