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The Pros and Cons of Claiming Social Security Early

The Pros and Cons of Claiming Social Security Early

December 20, 2021

Even the most careful plans must sometimes change. Each year, millions of workers retire, and some of those do so earlier than expected. Others stick with their jobs but decide to claim their Social Security benefits early. Why do some people make this choice? And is it worth your consideration?

First, we must establish the fact that with regard to retirement planning and Social Security benefits, there is never a course of action that works perfectly for everyone. We must all make plans with regard to our own unique situations. Having said that, some rules and consequences do apply to everyone. 

The reasons for considering an early Social Security claim are varied, but generally involve the following factors:

  • You need to retire early due to disability, illness, or some other personal reason
  • You want to retire early because you simply feel ready
  • You’ve become unexpectedly unemployed, and are wondering if claiming Social Security would help
  • You’re still employed, but feel that the additional income from Social Security could be helpful

Of course, there are consequences to filing an early Social Security claim:

  • Your checks will be permanently reduced, as much as 30 percent if you file at age 62
  • Your spouse’s spousal benefits will be affected, if they were planning to file a claim based on your record
  • If you’re still working, benefits will be reduced by one dollar for every two dollars you earn over a specific threshold each year (for 2022, that threshold is set at $19,560)

Those “cons” can obviously affect your budget in a potentially negative way. But for some people, the “pros” of an early Social Security claim are worth it:

  • You need the income now
  • You’ve decided to devote the income to paying down debts before finally retiring
  • You’re concerned about life expectancy and want to receive your benefits now
  • You’re emotionally ready for retirement and can accept the reduced benefit

Consult with us if you’re considering an early Social Security claim. We can help you decide if this move fits into your overall long-term financial plan.