Thinking About Taking Social Security at 62? Why You Might Not Just Be Hurting Yourself

Anyone who is familiar with the Social Security system is certainly aware that your monthly payment increases the longer you wait to apply for retirement benefits. Although you can apply for benefits as early as age 62, doing so is almost always unwise from a strictly financial perspective. However, many people do apply for benefits at age 62, which may financially harm more people than just themselves.

Anyone who is familiar with the Social Security system is aware that the longer you wait to apply for retirement benefits, the higher your monthly payout will be. (Photo: Britannica)

As average American becomes older, the system will be under even greater strain

According to John F. Wasik, author of “Lincolnomics” and 18 other works, when millions of Americans apply for Social Security around age 62, it places extra pressure on the system’s trust fund.

In an article from GoBankingRates, Wasik recently opined in a Forbes post that as the average American becomes older, the system will be under even greater strain.

The Old Age and Survivors Insurance (OASI) Trust Fund, a budget surplus that now covers around 23% of Social Security benefits, is the trust fund he’s talking to. In around ten years, the OASI fund is predicted to run out of money. When that happens, Social Security’s only source of funding will be payroll taxes.

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Social Security Administration encourages retirees to delay receiving benefits by increasing their monthly payments

Due to the large number of baby boomers who have reached retirement age and begun applying for benefits, the OASI fund is quickly running out of money. When the enormous population of boomers were working and paying into the system, they helped contribute to the Social Security surplus. The system is being depleted as a result of people claiming Social Security benefits rather than making contributions.

Because of this, the Social Security Administration encourages retirees to delay receiving benefits by increasing their monthly payments. Delaying your Social Security application increases your payout and prevents the SSA from paying you right away.

However, one of the SSA’s main financial plans is nullified if you apply for benefits at age 62 rather than full retirement age or later. You can also suffer a severe personal financial setback in the meanwhile.

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