Philadelphia, PA – Seniors in the United States have the option to choose their Social Security filing age, but this decision comes with both pros and cons. Many may find it appealing to receive their money sooner, especially if the need is urgent. However, filing early could lead to long-term financial difficulties, making it crucial to carefully consider the implications of such a decision.
When discussing early Social Security claims, it typically refers to signing up before reaching the full retirement age (FRA), which is around 66 or 67, depending on the individual’s year of birth. The earliest age at which one can sign up for Social Security is 62, and while this may be tempting for various reasons, it is important to note that claiming benefits before FRA results in a reduction of the monthly benefit. For example, filing at age 62 with an FRA of 67 could mean accepting a 30% reduction in benefits for life.
A recent survey conducted by Nationwide revealed that 42% of those who chose to sign up for Social Security early indicated that it had a negative financial impact on them. This highlights the potential drawbacks of claiming benefits before reaching the full retirement age, urging individuals to carefully weigh the long-term consequences.
It’s understandable why individuals may feel compelled to start collecting Social Security as soon as possible, especially if an unforeseen early retirement leaves them with limited options. However, if the option to wait until FRA exists, it should be seriously considered. With the uncertainty of how long one’s savings will last in retirement, locking in a higher monthly benefit through a delayed claim could provide added financial security in the long run.
While there may be cases where an early Social Security claim proves to be beneficial, it is essential to proceed with caution and evaluate the potential financial gains of waiting. Considering the long-term implications and carefully assessing one’s financial situation can ultimately lead to a more secure retirement.