As early as age 62, you are eligible to begin receiving Social Security retirement benefits. But once you reach full retirement age, you are eligible for full benefits. Your benefit amount will rise if you wait until you reach full retirement age—that is, until you are 70 years old.
Your benefits are lowered by a tiny percentage for each month that you are younger than the full retirement age if you begin receiving benefits early.
Use the chart below and choose your year of birth to determine how much your benefit will be reduced if you start receiving benefits at age 62 and continue until you reach your full retirement age. Based on a $1000 monthly benefit estimate at full retirement age, this example
When it comes to retirement planning, one of the most important decisions you’ll make is when to start claiming your Social Security benefits. While you can begin receiving benefits as early as age 62, doing so comes with both advantages and disadvantages that you should carefully consider.
Advantages of Taking Social Security at Age 62
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Immediate Access to Funds: If you need the money to cover your living expenses or other financial obligations, taking Social Security early can provide immediate financial relief. This is especially beneficial for individuals who may have limited retirement savings or are facing unexpected expenses.
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Longer Benefit Period: By starting your benefits early, you’ll receive payments for a longer period of time, potentially increasing the total amount of money you receive over your lifetime. This can be advantageous if you have a shorter life expectancy or want to maximize your income during your retirement years.
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Potential Investment Opportunities: Some individuals choose to take Social Security early and invest the money in hopes of generating a higher return than the guaranteed increase they would receive by delaying benefits. However, this strategy requires careful consideration of investment risks and potential tax implications.
Disadvantages of Taking Social Security at Age 62
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Reduced Benefit Amount: The most significant disadvantage of taking Social Security early is the permanent reduction in your monthly benefit amount. Depending on your birth year, your benefits could be reduced by as much as 30% compared to what you would receive at your full retirement age. This reduction can have a substantial impact on your overall retirement income.
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Smaller Cost-of-Living Adjustments: In addition to the initial reduction in your benefit amount, you’ll also receive smaller cost-of-living adjustments (COLAs) throughout your retirement. These adjustments are based on the Consumer Price Index (CPI) and help ensure that your benefits keep pace with inflation. However, if you start your benefits early, your COLAs will be based on a smaller base amount, resulting in lower increases over time.
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Earnings Penalty: If you continue to work after claiming Social Security benefits before reaching full retirement age, your benefits may be temporarily reduced. For every $2 you earn above a certain limit ($21,240 in 2023), your benefits will be reduced by $1. This penalty can significantly impact your income if you plan to work during your early retirement years.
Special Considerations
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Withdrawal Option: If you regret taking Social Security early, you may be able to withdraw your application within 12 months of becoming entitled to benefits. However, you’ll need to repay all the benefits you received, including any Medicare premiums that were withheld.
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Full Retirement Age: Your full retirement age (FRA) is the age at which you are eligible to receive full Social Security benefits without any reduction. This age varies depending on your birth year, ranging from 66 to 67 for individuals born between 1943 and 1960.
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Delayed Retirement Credits: If you delay claiming your benefits past your FRA, you’ll earn delayed retirement credits that increase your monthly benefit amount by 8% per year, up to age 70. This can significantly boost your retirement income if you can afford to wait.
Making an Informed Decision
Ultimately, the decision of when to start claiming Social Security is a personal one that depends on your individual circumstances, financial goals, and health status. Carefully weigh the pros and cons, consider your life expectancy, and consult with a financial advisor to determine the best strategy for your situation.
Here’s a table summarizing the key points discussed above:
| Feature | Advantages | Disadvantages |
|---|---|---|
| Benefit Amount | Reduced | Full |
| Benefit Period | Longer | Shorter |
| Investment Opportunities | Potential | Limited |
| Cost-of-Living Adjustments | Smaller | Larger |
| Earnings Penalty | Yes | No |
| Full Retirement Age | N/A | Varies (66-67) |
| Delayed Retirement Credits | No | Yes (up to 8% per year) |
By understanding the advantages and disadvantages of taking Social Security at age 62, you can make an informed decision that aligns with your retirement goals and financial situation. Remember, there is no one-size-fits-all answer, and the best approach for you may be different from someone else.
Full Retirement and Age 62 Benefit By Year Of Birth
| Year of Birth 1. | Full (normal) Retirement Age | Months between age 62 and full retirement age 2. | At Age 62 3. | |||
|---|---|---|---|---|---|---|
| A $1000 retirement benefit would be reduced to | The retirement benefit is reduced by 4. | A $500 spouses benefit would be reduced to | The spouses benefit is reduced by 5. | |||
| 1943-1954 | 66 | 48 | $750 | 25.00% | $350 | 30.00% |
| 1955 | 66 and 2 months | 50 | $741 | 25.83% | $345 | 30.83% |
| 1956 | 66 and 4 months | 52 | $733 | 26.67% | $341 | 31.67% |
| 1957 | 66 and 6 months | 54 | $725 | 27.50% | $337 | 32.50% |
| 1958 | 66 and 8 months | 56 | $716 | 28.33% | $333 | 33.33% |
| 1959 | 66 and 10 months | 58 | $708 | 29.17% | $329 | 34.17% |
| 1960 and later | 67 | 60 | $700 | 30.00% | $325 | 35.00% |
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Social Security at Age 62, 67, 70 | Pros and Cons of Each
How much Social Security benefits do you get if you retire at 62?
However, the Social Security Administration reduces benefits by 30% for people who retire at 62, meaning they receive just 70% of their full retirement benefit each month for life. For people born in 1960 or later, full retirement age is 67. This is the age at which you are entitled to 100% of your Social Security retirement benefit
Should you claim social security if you’re 62?
Every scenario has pros and cons. Workers can maximize their benefit by claiming at age 70, but doing so means going without Social Security for several years. Alternatively, workers can maximize the number of payments they receive by claiming at age 62, but doing so means a smaller benefit for life.
Does age 62 affect Social Security benefits?
Retirees who claim Social Security at age 62 get a much smaller benefit, but that strategy maximizes the number of payments. Retirees who claim Social Security at age 70 get a much bigger benefit, but that strategy minimizes the number of payments.
Is 62 a good age to start claiming social security?
In the U.S., you can retire as early as 62 and start claiming your Social Security. And as of 2021, according to the Congressional Research Service, about 30% of Social Security applicants were 62. But is it right for you? A 2022 paper reveals that retirement benefits taken at age 70 have a value of 76% more than those that start at 62.