Now that you understand the problem with claiming Social Security at 62, let's talk about why so many people do so. For the most part, it's because they're forced to retire, they don't have enough savings, and they need the money as soon as possible. It's estimated that a good 60% of Americans end up retiring earlier than planned due to factors such as health issues, job loss, or the need to care for a spouse or dependent. Without adequate savings, these same people typically have no choice but to file for benefits as early as possible.
And let's be clear: Most folks have inadequate savings.
The average retirement savings balance among households aged 56 to 61 is $163,577, and though that might sound like a lot, it's not nearly enough to support someone throughout a retirement that could last 25 years or longer. Furthermore, while $163,577 represents the average savings balance among near-retirees, the median savings balance for that age group is a mere $17,000. In other words, the typical American household's retirement savings fall far short of their future income needs.
To be fair, not everyone who claims Social Security at 62 does so out of desperation. There are some people who save really well during their working years and decide to retire early because they're in a strong enough financial position to do so. Meanwhile, those who find themselves in poor health are often better off filing for benefits as early as possible. That's because Social Security is designed to pay recipients the same total lifetime benefit regardless of when they first file, assuming they live to an average life expectancy. For folks who expect to pass away sooner, filing earlier can result in a higher lifetime payout.