If you're eligible for Social Security benefits, you'll have a choice of when to start collecting them: early (as soon as age 62), at your full retirement age (66 to 67, depending on your birth year), or late (up to age 70). This article explains why you might want to claim you𓃲r Social Security benefits early—and why not.

Taking Social Security Early: An Overview

The 澳洲幸运5官方开෴奖结果体彩网:Social Security Administration (SSA) calculates your monthly benefit based on a few factors, including how much you've paid into the system over the years and when you decide to start collecting benefits. If you claim benefits at your full retirement age, as 澳洲幸运5官方开奖结果体彩网:Social Security defines it (see table below), you'll receive your full benefit.

But you can also start claiming as early as age 62, in return for a permanently reduced benefit.

On the other hand, if you wait past your full retirement age to collect benefits, you'll receive credits for each month you delay up to age 70. These 澳洲幸运5官方开奖结果体彩网:cr♓edits increase your monthly payment by two-thirds of 1% for each month that you wait—or 8% a year.

Which option is right for you? Here are some advantages and disadvantages to consider if you're weighing whether to claim your benefits early.

Advantages of Taking Social Security Early

There are a number of reasons you might consider taking Social Security benefits before you reach full retirement age.

1. You Need the Money Now

Many Americans claim their Social Security benefits early for a simple reason: They need the money to cover their everyday living expenses. During the recession years of 2008 to 2009, for example, close to 36% of eligible men and 39% of eligible women started claiming benefits at age 62. The COVID pandemic had the opposite effect. A study by the Center for Retirement Research at Boston College found that workers were a bit less likely to start their benefits early (before full retirement age) during the pandemic.

2. You Want the Money Now

Even if you don't need your benefits early to support yourself, you may have other reasons for wanting to take them as soon as possible.

Some people are concerned that Social Security may be unable to meet all of its obligations in the future, so they might as well get their benefits now. Others believe they could do better by collecting benefits and investing that money rather than leaving it in the government's hands.

That said, you would have to be a skilled (or lucky) investor to beat the 6% to 8% guaranteed annual return on your money that Social Security offers to those who wait until full 澳洲幸运5官方开奖结果体彩网:retirement age or later.

3. You Fear You Won't Be Around to Collect Later

If you don't expect to live long enough to profit from delaying your benefits, your wisest course may be to take them sooner rather than later. Even if you were to receive a much bigger benefit by claiming at age 70, you could be well into your 80s by the time you'd come out ahead in terms of the total benefits you've received. Financial planners refer to this as your 澳洲幸运5官方开奖结果体彩网:breakeven age.

Disadvantages of Taking Social Security Early

Of course, claiming your benefits early also has so♎me downsides.

1. Your Benefits Are Permanently Reduced

Claiming your benefits early means 澳洲幸运5官方开奖结果体彩🎶网:they will be reduꦛced on a permanent basis. For example, as the table above illustrates, someone born in the 1960s or later who takes their benefits starting at age 62 will get 30% less each month for the rest of their lives than if they'd waited until their full retirement age of 67.

2🍰. Your Cost-of-Living Adjustments Will Be Smaller

In addition to receiving a smaller monthly benefit than if you'd waited until your full retirement age, you'll get less on a dollar basis from any future 澳洲幸运5官方开奖结🍸果体彩网:Social Security cost-of-living adjꦍustments (COLA). Beneficiaries are receiving a 3.2% increase in 2024 (the increase was 8.7% in 2023). Someone born between 1943 and 1954 who currently receives a full monthly benefit of $2,000, for example, will get an extra $64 each month.

If that same beneficiary started taking Social Security at age 62, their benefit would have been reduced by 25%, to a current $1,500, and they'd get a COLA of $48 a month in 2024. And because of the effects of 澳洲幸运5官方开奖结果体彩网:compounding,𒁏 the difference between the two benefits will continue to widen year after year.

3. You'll Be Penalized If You Work—Though It's Temporary

Before you reach your full retirement age, any money you earn from a job can affect your Social Security benefits. In 2024, Social Security will deduct $1 from your benefits for each $2 you earn above $22,320 ($21,240 in 2023). If you turn your full retirement age in 2023 or 2024, it will deduct $1 from your benefits for each $3 you earn above $56,520 until your birthday month. Although you will get the money back later after you reach your full retirement age, you'll have that much less to spend in the meantime.

Special Considerations

What if you claim your benefits early but then regret it? In some c𝐆ircumstances, the Social Security Administration offers the opportunity for a do-over.

In a process called a withdrawal, you can cancel your application for up to 12 months after you become entitled to retirement benefits. You will have to repay any Social Security benefits you received, including any money that was withheld from your benefits to pay 澳洲幸运5官方开奖结果体彩网:Medicare premiums.

After withdrawing your application, you can reapply for benefits later, at a time of your choosing.

The Bottom Line

You can begin collecting your Social Security benefits as early as age 62, but you'll get smaller monthly payments for the rest of your life if you do. Even so, claiming benefits early can be a sensible choice for people in certain circumstances.