Claiming Social Security at 62 may feel like the obvious move, especially as concerns over the program's long-term funding grow. But experts say locking in benefits too early could permanently shrink retirement income and cost retirees thousands over time.

Under Social Security Administration benefit calculations, workers with a full retirement age of 67 could see monthly benefits reduced by about 30% if they claim at 62, while delaying until 70 could increase benefits by roughly 24%.

For example, someone eligible for $2,000 per month at 67 would receive only $1,400 at 62, but about $2,480 at 70.

When 62 Makes Sense

Claiming early is not always a mistake. CNN cited Jack Smalligan, senior policy fellow at the Urban Institute, who said individuals in poor health or with shorter life expectancy may benefit from claiming earlier. In some cases, disability benefits may even offer better support than reduced retirement benefits.

Early claiming may also make sense for those pushed into retirement by layoffs or financial hardship. "Social Security is amazing if this does happen to you. It's a really important backstop," said Bill Sweeney, senior vice president at AARP.

The 2032 Risk Isn't a Reason to Panic

The Social Security retirement trust fund is projected to be depleted by 2032, after which incoming payroll taxes would cover only about 78% of scheduled benefits, implying potential cuts of roughly 22% to 24%. That could translate to an average reduction of about $500 per month for retirees.

Still, claiming early purely out of fear may not be the right move. Marc Goldwein of the Committee for a Responsible Federal Budget warned that trying to outguess future policy changes is "a lot of guesswork."

Claiming decisions can be even more complex for married couples. Martha Shedden of the National Association of Registered Social Security Analysts said spouses may need to coordinate claiming strategies, especially when there is a large earnings gap, since claiming early can also reduce survivor benefits.

Disclaimer: This content was produced with the help of AI tools and was reviewed and published by Benzinga editors.

Image via Shutterstock/ Lane V. Erickson