One of the most vexing questions in retirement boils down to this: Should I take Social Security early, or should I wait?
The right answer is surprisingly complex, and largely depends on your financial circumstances, health and lifestyle desires. We have addressed this debate in two stories:
- “7 Reasons Not to Take Social Security at Age 62“
- “5 Times When It’s Smart to Claim Social Security Early“
While some people wait until their full retirement age or later to file for their benefits, many others take Social Security as soon as they can get it — which is age 62 in most cases.
Both men and women who file for Social Security at age 62 are more likely to fall into one of the following groups, compared with people who claim benefits later, according to a 2021 report by the nonprofit research organization Rand Corp., sponsored by AARP.
The report is based on data from the University of Michigan Health and Retirement Study spanning from 1992 to 2016.
Retirees with less education
The report notes that on average, those who claim Social Security later have 0.6 of a year to one year more of education than those who claim at 62.
Perhaps it is no surprise that those with lower levels of education tend to take Social Security early. After all, less education typically results in reduced earning power over one’s working lifetime. Thus, many of those without degrees might need to tap their benefits as soon as they can get them.
Retirees living in rural areas
Those who claim benefits at age 62 are more likely — by 7 to 14 percentage points — to live in rural areas than retirees who claim later. The study’s authors speculate this may be because it can be more difficult to find work in rural areas than in big cities.
They note that the jobs that do exist in rural areas tend to have longer commute times and often are physically demanding. These downsides to rural work are extra incentives for folks living in the country to leave the workforce earlier and grab Social Security benefits quickly.
Another possible factor is that the cost of living tends to be lower in rural areas than in urban areas.
Retirees whose health limits their ability to work
As we detail in “7 Costly Health Problems That Strike After Age 50,” many health conditions begin to impact large numbers of people in their 50s or later. Some of these ailments may cause only minor limitations, but others can be debilitating.
So, it makes sense that people who take Social Security at age 62 are more likely to have a medical condition that limits their ability to work.
Retirees who don’t expect to live to 75
Most of us hope to live to a ripe old age. But unfortunately, that scenario will not be a reality for everyone. Some people have illnesses that are likely to cut short their lives. Others have a family history that does not suggest longevity is in the cards.
Those who take Social Security at age 62 are less likely to expect to live to the age of 75. In fact, the study found that men who take Social Security later are more likely — by 5 percentage points — to express the belief that they will live to at least age 75.
Expecting a shorter lifespan is a natural reason to take Social Security early. After all, what is the point of delaying benefits if you don’t expect to be around to enjoy them?
Retirees who were not working at age 60 or 61
The Great Recession left millions of Americans unemployed. Roughly a decade later, the coronavirus pandemic put similar numbers of workers out of a job.
In both cases, the economy eventually recovered — but not for everyone. If you lose your job later in life, it can be harder to find good work again, even when overall employment bounces back.
So, it’s no surprise that those who apply for Social Security benefits at age 62 are less likely — by 20 to 25 percentage points — to be employed at age 60 or 61. They likely need the cash.
Retirees who were working in lower-paying jobs at age 60
The Rand Corp. report shows that people who start receiving Social Security benefits at age 62 are more likely to have been working in a lower-paying job at age 60.
For example, among men who were working at age 60, those who claimed benefits at age 62 earned $22,000 to $34,000 per year less than those who delayed claiming.
“Being employed at a high-paying job is thus a consistently strong predictor of delaying claiming past age 62,” the report notes.
Retirees who were working physically demanding jobs at age 60
When you are 25, a hard day of manual labor is a relative breeze. That is less true when you reach your 60s.
Those who take Social Security at age 62 are more likely to have had physically demanding jobs. And who can blame them for wanting to quit working earlier so they can spare their bodies from more wear and tear?
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