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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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October 08, 2014 at 11:42 pm

My spouse is drawing Ssan but I intend to applying when I turn 66 and suspend until I reach 70 this also is affect by when I plan to retire I am looking at 2018 or 2021 when I turn 70. Would enjoy some information on this plan.

September 11, 2014 at 9:16 pm

Tony j is right,the financial analyst tell us you get more benefits if you wait longer, but what they are sugar coating is SS is slowly depleting, and the longer you wait, the less chance they will have to pay us.Remamber, they work for the GOV.I'm not there yet, but the life expectancy of the average african american is not very high,so all that money I paid in over decades of working, I won't get to collect. My kids are all grown, and have they're own lives and families.So, the day I turn 62, my boss will have to say goodbye.

August 29, 2014 at 5:23 pm

I did the math, and I would have to live PAST 85 before I would see any loss from taking my money at 62 compared to 65 or, I think I will take my money early, you are in better physical and mental shape early and are more active, as you get older, you do less and spend 62 it will be for me.

Neal H
August 13, 2014 at 9:00 pm

I keep reading article after article recommending that people wait until full retirement age before taking social security. Very simply, a couple waiting until 66 to take SS rather then 62 can be giving up nearly $150,000 to get less then $10,000 more each year after 66. Maybe I'm shortsighted, but I'd rather get my money up front especially when we're dealing with the government.

John J Bryant
August 12, 2014 at 2:07 am

Don't be loyal to a job or career, after you become eligable for social security, or your companies retirement fund. No one is guaranteed life beyond, beyond 63 years of life, Leave the job as soon as possible, while you still have some time, that you can enjoy life with a smile on your face

Tom S
August 06, 2014 at 8:18 pm

My full retirement age for Social Security was 66, since I was born in 1944. I retired at 65 because I found with my union pension kicking-in at 65 plus my Social Security,even retiring one year early, almost matched what I was making working a full split-shift working five days a week...getting up at 4:30 in the morning every day. It took about 10 seconds on that one......
By the way, I turn 70 this October and I'm doing great from the lack of stress!!!!

Toni J
August 05, 2014 at 1:12 pm

If you wait until 70 to retire as the financial analysts would have us do, you have no way of knowing what your health will be and what you will be capable of doing to enjoy your retirement. Retire at 62 and enjoy some of the "good" years you have left. My father was in a nursing home by the time he was 76 or 77. What good would the extra money have done for him. I have worked 35+ years and that is long enough for me.