If you’ve done any amount of digging into the matter, then you’ve almost certainly been advised to wait as long as possible before initiating your Social Security retirement benefits. After all, while the full retirement age that would secure you 100% of your intended payments is between 66 and 67 — depending on when you were born — waiting until you’re 70 years old to start collecting these benefits would translate into measurably higher monthly checks.

There’s another option on the other side of this spectrum, however. Although it ultimately means much smaller payments, there’s a case to be made for claiming at the earliest possible age of 62. Just don’t take such a decision lightly, since it’s a permanent choice.

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Patience pays off

As was noted, anyone eligible for Social Security‘s retirement benefits will see 100% of their intended payments only if they start collecting once they reach their full retirement age, or FRA. This year’s FRA is 66 years and 10 months, applicable to people born in 1959. Next year’s full retirement age will be a full 67 years, where it will remain unless changed again by legislation.

But what if you wait to claim these benefits? Doing so will raise your eventual payments by about 0.66% per month, or 8% per year. For anyone reaching their full retirement age this year or next year, in fact, delaying these benefits until you’re 70 years of age would mean about a 25% increase in the size of your monthly checks.

Just don’t wait much beyond the point at which you turn 70 to initiate your payments. Not only does the Social Security Administration stop raising your future monthly benefits once you turn 70, it will only retroactively pay you for a maximum of six months.

Image source: Getty Images.

Or maybe you were thinking of going in the other direction, and starting these payments well before reaching your FRA? That’s an option, too. Doing so dramatically reduces the size of your payment, though, gradually decreasing it by as much as 30% if you choose to claim at the earliest possible age of 62. Ouch!

The case(s) for claiming sooner rather than later

So why would anyone want to seemingly undermine their own fiscal future by locking in these lowered payments?

There are actually a handful of understandable reasons for doing so. Chief among them is the possibility that you simply need this money to avoid being hungry and homeless right now, and all other options such as working or monetizing any real estate you may own are off the table.

There’s a close-second strategic reason to start collecting Social Security well before you’ve reached your FRA even if you don’t need the money right now. That’s the possibility that you’ve got something more productive you can do with this cash flow in the meantime, like investing it in something similarly safe.

And for better or worse, this bar is set relatively low. Although the effective rate of return on your money tied up by the Social Security program varies from one year to the next, it’s usually in the ballpark of the nation’s consumer inflation rate, or the yields on U.S. Treasury bonds.

For a long stretch between 2008 and 2021 — when interest rates were at or near rock-bottom levels – beating this rate of return with bonds or CDs wasn’t a realistic option. With rates now back at long-term norms, even most money market funds are paying more than the average annual benefit that could be collected by letting the Social Security Administration simply sit on your money prior to reaching your full retirement age.

Just bear in mind the ease and temptation of not actually taking this constructive step with the cash once it’s in your hand.

Then there’s a third argument for claiming Social Security sooner rather than later. That’s the prospect of looming cuts to benefits as the program approaches technical insolvency. If reduced payouts are inevitable (and let’s acknowledge that there’s at least some politicization surrounding these worries), you’ll want to collect as many full payments as you can for as long as you can.

And for what it’s worth, working at the same time you’re collecting early, is an option too, and perhaps a good one for lots of people.

Although earning income at the same time you’re receiving Social Security payments means you run the risk of reducing these payments, contrary to a common assumption, that’s not lost money. Any reduction in benefits you may experience due to earning work-based wages now is ultimately credited back to you, making your future monthly Social Security payments bigger. In many ways, this choice allows you to proverbially have your cake and eat it too, allowing you to earn income while you collect benefits without permanently penalizing you for either.

Your initial plan is likely your best one

But what if none of these arguments are strong enough to convince you that starting your Social Security benefits at the age of 62 is worth the cost? That’s probably for the best. Too much tinkering and ill-advised optimization can often end up doing more harm than good. You’re usually better served by using such programs as initially intended, and sticking with your retirement and financial plans that have been in place for years.

That being said, there’s nothing wrong with pulling out some pencil and paper and crunching a few honest numbers. For a few people, taking early Social Security actually does make good sense.

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