Why Do So Many People Claim Social Security at 62?
The most popular age in America to claim Social Security benefits is age 62, according to the Center for Retirement Research. In fact, in 2013, 48% of all women and 42% of all men who claimed Social Security retirement benefits were just 62 years old. Since 62 is the youngest age at which these benefits can be claimed, it's clear that more than 4 in 10 Americans can't wait to get their hands on Social Security checks.
Unfortunately, for millions of retirees, benefits will be significantly lower if they claim benefits at 62 than if they wait until full retirement age (FRA). When you retire before FRA -- which is age 67 for Americans born after 1960 -- benefits are reduced by 5/9 of 1 percent for each month prior to FRA, up to 36 months. If you retire more than 36 months before FRA, benefits are further reduced by 5/12 of 1 percent, monthly. For a person retiring at 62 whose full retirement age is 67, retiring 60 months early would mean a 30% reduction in benefits.
There are circumstances where it makes sense to retire and claim Social Security benefits at 62, despite the big reduction. If you're going to receive a public pension that would cause Social Security benefits to be reduced, or if you have a non-working spouse who needs to claim benefits on your record, it may be wise to file early.
Source: Fool.com
