Take the money and run… (You should start collecting Social Security at 62)

By James J. Devine

Opting to collect Social Security at age 62 rather than waiting until the full retirement age of 67 makes a lot of sense for many Americans, particularly when considering financial needs, life expectancy, and personal circumstances.

Starting Social Security at 62 allows retirees to gain immediate access to their benefits, providing them with a financial cushion earlier in their retirement. By choosing this option, an individual can accumulate approximately $84,000 in benefits by the time they reach 67.

This early access to funds can be crucial for those who have immediate financial needs or who wish to reduce their working hours or retire fully.

Although waiting until 67 results in a higher monthly benefit, the total amount collected over time by starting at 62 can be comparable. For example, a retiree who begins collecting benefits at age 67 might receive $2,000 per month, amounting to $312,000 over the course of 13 years, assuming they live until age 80.

In contrast, someone who starts collecting at 62, even with a reduced benefit of $1,400 per month, would collect $302,400 over 18 years. The difference between the total amounts collected in these scenarios is relatively small, which makes the option of starting early appealing to many.

Life expectancy is another critical factor in this decision. For those with a shorter expected lifespan, starting benefits at 62 may be more advantageous.

The break-even point, where delaying benefits equals the total amount received by starting early, usually falls around age 78-80.

Many individuals should not expect to live that long, so collecting Social Security at 62 could provide more financial benefits over their lifetime.

Life expectancy can vary significantly across different racial and ethnic groups, which may influence the decision to collect Social Security early.

On average, life expectancy is higher for white Americans compared to Black and Indigenous Americans.

According to the Centers for Disease Control and Prevention (CDC), white Americans have a life expectancy of approximately 78.8 years, while Black Americans have a lower life expectancy, averaging around 74.5 years.

Indigenous Americans also face lower life expectancies, often due to disparities in healthcare access, economic conditions, and chronic diseases.

These differences mean that for some racial and ethnic groups, the benefits of starting Social Security at 62 may be more pronounced, as they may not live long enough to reach the break-even point that favors delaying benefits.

Choosing to begin Social Security at 62 also offers retirees greater flexibility in planning their retirement.

The additional five years of benefits can significantly ease financial burdens, whether to cover living expenses, support family members, or enjoy retirement with more financial freedom.

The process of applying for Social Security is straightforward, with individuals able to apply as early as four months before their 62nd birthday, making the option of early collection even more accessible.

For many retirees, especially those with immediate financial needs, concerns about longevity, or belonging to racial or ethnic groups with lower life expectancies, the decision to collect Social Security at 62 rather than waiting until 67 offers a practical and beneficial solution, allowing them to enjoy their retirement years with greater financial security.