Filing for Social Security benefits is easy. Determining when to file? That can be a different story altogether.
For many people, holding off until they at least reach their full retirement age (which is 67 for anyone born in 1960 or later) makes sense financially. Delaying until they're age 70 to file for Social Security will boost their monthly benefit even more.
But there are cases when waiting isn't the best approach. Here are two no-brainer reasons to claim Social Security benefits at age 62, the earliest age possible.
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1. If your health deteriorates
Many Americans remain healthy well into their 80s and 90s -- and sometimes even longer. However, that's not always the case.
If your health deteriorates in your late 50s or early 60s, you should consider filing for Social Security retirement benefits at age 62. This is especially applicable if your health condition will likely lower your expected life span. (Note: You'll want to file around four months before you want your benefits to begin.)
There's an important caveat, though. The scenario I'm talking about here is if your health has deteriorated somewhat but not so much that you couldn't work at all. If your health problems are so severe that you can't work, you should explore filing for Social Security disability benefits rather than retirement benefits.
Note that the Social Security Administration has strict guidelines to determine qualification for disability benefits and the disability benefits usually involve a five-month waiting period after your disability began before they kick in.
If you qualify, your disability benefits will be the same amount as your full retirement benefits with no penalties. Assuming you continue to receive disability benefits until you reach your full retirement age, SSA will then convert the benefits to retirement benefits.
2. If you can't make ends meet without Social Security
Sometimes health problems aren't an issue, but financial problems are. If you're approaching age 62 and simply can't make ends meet, you'll want to consider filing for Social Security retirement benefits.
Before you file, though, it's best to make sure you've exhausted all of your options. If you've lost your job, don't assume that you won't be able to find another one. Check out online job sites. Ask friends and family to be on the lookout for opportunities. Consider moving into a new industry if it helps you in your job search.
Of course, these efforts don't always pay off. If not, Social Security retirement benefits could be the financial lifeline you need.
What if you begin receiving retirement benefits but then your financial status changes? Maybe you found a great new job or received an inheritance. You can stop your Social Security benefits but only within the 12-month period after you first claimed benefits and you'll have to return all of the benefits you received up to that point.
It's also possible to resume working and continue to receive early retirement benefits. However, SSA will deduct $1 for every $2 you make above a specified limit. For 2023, the limit is $21,240. In the year you reach your full retirement age, SSA will deduct $1 for every $3 above a higher limit. This higher limit is $56,520 in 2023.
Filing early comes at a cost
Regardless of why you would file for Social Security retirement benefits at age 62, remember that doing so comes at a cost. Your monthly benefits will be around 30% lower than what they'd be if you waited until the full retirement age of 67.
