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Why take Social Security early?

By Jennie L. Phipps ·
Wednesday, May 28, 2014
Posted: 4 pm ET

You can claim Social Security beginning at age 62, but if you do that, your benefit will be substantially lower. Still, many people decide to claim at the earliest possible age.

Of those born in 1946 with a full retirement age of 66, about 32 percent of men and 38 percent of women claimed Social Security in the first month that they turned 62, according to a new report by the General Accountability Office, or GAO. Only 8 percent of men and 7 percent of women waited until age 67 or later to claim -- despite much higher benefits. (See chart below.)

Why do so many people grab the iron ring instead of waiting for the brass? This GAO study outlines lots of easily understandable reasons.

  • People are tired of working. People who had already worked at least 35 years by the time they were between age 60 to 62 were 38 percent more likely to claim Social Security early.
  • Physically demanding jobs make working longer hard or impossible. People who held a blue-collar job at age 60 to 62 were 55 percent more likely to take retirement early.
  • Education has an impact. People who didn't have a college degree were 23 percent more likely to claim early.

How long people expect to live impacted when they claimed Social Security, but not as directly as you might suppose because household wealth also played a role in their decisions. People with less than a 30 percent expectation of living to age 75 and with household wealth in the comfortable range -- between $236,794 and $585,052 -- were most likely to take Social Security early, with 78 percent claiming before full retirement age. People with less household wealth -- at or below $83,638 -- were most likely to delay claiming, with only 58 percent  claiming early, even though they didn't expect to surpass age 75. If you can't afford to quit, you don't.

Claiming Social Security early reduces household income. Those who claimed before full retirement age earned a median household income after claiming of $49,612. Those who waited until full retirement age or later, conversely, earned a median annual household income of $71,907. That's a huge difference even though the study also points out that people who claimed early tended to have higher income from pensions than those who delayed. Claiming early is expensive.

I found this study interesting because it seems to me -- as a woman who sits behind a desk all day and likes what she does -- that delaying claiming and continuing to work makes the most retirement planning sense. But obviously, not everybody sees it that way -- and often for good reasons.

As you consider when to claim, avoid these six Social Security traps.

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July 25, 2014 at 9:53 pm


NYS resident
July 17, 2014 at 5:11 pm

I am certainly not waiting beyond the age of 62. The first reason is that it would take upwards of eight years to reach the breakeven point if one delayed it until the age of 66. The other important part of this equation is that if one is a smart investor (not trader), this breakeven point is actually much further out beyond the age of 66 if this money at age 62 is invested wisely. The combination of a healthy dividend or distribution payment (possibly on a monthly basis) with factoring in compounding, can put that breakeven point way out to age 70.

What do most 70+ retirees do with their time? Not all that much and their demand for sizeable income/spending is already behind them. Take that money as early as possible and make it earn additional income from it and one will do just fine when comparing starting to collect at 62 rather than 66.

July 15, 2014 at 11:25 pm

As a state employee with only 18 yrs service, I retired at 60 and at 62 took SS. If I had worked until 65 my State Retirement would have been a whopping $50 more a month. At 72, I still haven't hit the break even point. My golden parachute from 30yrs military service is TRICARE FOR LIFE.

July 15, 2014 at 5:12 pm

Most people don't expect to retire solely on Social Security, so the people who work longer can save up more money, perhaps pay off their house, etc. And in addition to the increased savings and paid off house, they will get more Social Security. Anyone with a good pension will probably retire early. But most people who work in the public sector do not have pensions these days. The math doesn't just involve the Social Security, but in what you are able to achieve in those extra working years.

July 15, 2014 at 1:56 pm

It takes about 12 years to break even on the difference between taking Social Security at 62 vs. 66. That means that the payments received for the 48 months before age 66, if you spread that amount across in the increased payments at age 66, it would take until age 78 for it to have been "better" to wait until age 66, because the higher benefit payment would finally have mattered, from a math standpoint. Just the math makes it a little too simple of an evaluation - what did you do with the payments received starting at 62, did you do the dream vacation and travel that you might not be up for at age 78? Did you invest any of the benefit amount, or pay off your mortgage, or did that increase in the household budget allow you to make different financial decisions for your long-term benefit? The answer to when to take Social Security hinges on when you will die. If you know that, you can make a good decision. If a younger or longer-living spouse will be dependent on your benefits after you die, that means it is time to run the Social Security benefit calculators with various life scenarios, and make the call on the one you think is most likely.

July 04, 2014 at 7:46 pm

For most people, taking SS as early retirement means getting only 75% permanently. Unless you are in the position of having another pension or retirement fund, which many don't and for those who are disabled and already barely existing, that 25% less could be devastating.

Jane K
June 13, 2014 at 10:53 am

I am 61 and have started receiving a modest state retirement while continuing to work fulltime paying into SS for the past 20 yrs. How will the state retirement affect my SS ?

Jennie Phipps
May 31, 2014 at 8:05 pm

Don't take Ed's word for it. Get a sophisticated Social Security calculator like the one at and figure out the scenario that best fits your situation.

Especially when you are part of a couple who have been married at least 10 years, you'll have lots of options that will likely provide you with a significantly larger amount of money that you will get if both of you claim at 62.


Ed G
May 31, 2014 at 6:46 pm

Persons with a Social Security eligibility age of 66 are best off taking SS at age 62 if there life expectancy is 80 years old or less. Even with the higher rate at 66, it would take 14 years to catch up to those who started at 62.

Even worse is waiting until age 70 to claim. You'd have to live until you were 95 years old to break even with those who retired at 62.

For the vast majority of us, retiring at age 62 makes the most financial sense and also gives you several more years in which to enjoy retirement.

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