Why Retirees Claim Social Security at 62 and How It Affects Their Retirement Income: Evidence from the Health and Retirement Study

Abstract

Despite higher monthly benefits for those who delay, many people still claim Social Security retirement benefits at age 62, the earliest age of eligibility. This study uses data from the Health and Retirement Study to examine the demographic and occupational characteristics associated with early claiming, as well as the retirement income of early claimers compared with those who delay. The authors find that several work-related factors may cause people to claim Social Security benefits early and suggest they may face challenges in continuing to work at older ages.

For example, those who worked in physically demanding blue-collar jobs were 55% more likely to claim benefits prior to their full retirement age, after controlling for other factors, compared with those in all other occupations. Other factors, such as having lower expectations of living to age 75 significantly increase the likelihood of claiming early. The median income for those who claim at full retirement age or later was 45% higher after claiming benefits than for those who claimed early and 33% higher at age 72. Even when comparing early and delayed claimers with similar total income after claiming, average household income for delayed claimers was higher at age 72 than for early claimers.