Turning 62 comes with an important decision – should you start taking your Social Security retirement benefits early, or wait? While you can claim as early as age 62, doing so permanently reduces your monthly benefit. Waiting until your full retirement age (currently age 67 for those born in 1960 or later) allows you to receive your full benefit amount. Weighing the pros and cons can help you decide when is the best time for you to start collecting Social Security.
Claiming Social Security at 62 offers the allure of instant income. Who wouldn’t want retirement funds as soon as possible? However, while tempting, taking benefits at the earliest age decreases your monthly Social Security checks for life. Understanding how this early retirement reduction works is key when determining the ideal time to file.
This article explains how retiring at 62 impacts your Social Security benefit. Learn how monthly payments are reduced and why waiting a few years could pay off in the long-run. Get the answers to frequently asked questions to help decide if claiming Social Security five years early makes sense for your situation.
How Are Social Security Benefits Reduced at Age 62?
Your full retirement age, when you can get your full Social Security benefit amount, varies based on the year you were born. For those born 1960 and later, full retirement age is 67. If you claim benefits before this age, your monthly amount is permanently reduced.
Claiming at age 62 comes with the maximum reduction of around 30% less than your full benefit. For each month you claim Social Security before your full retirement age, your monthly benefit is reduced:
- By 5/9 of 1 percent per month for the first 36 months
- Then by 5/12 of 1 percent for the next 24 months
To receive your full benefit, you must wait to claim until your full retirement age. Delaying even longer, up to age 70, increases your benefit through delayed retirement credits.
The reduction in benefits for early filers is permanent – you won’t get a bump up in payments once you hit full retirement age. The decision of when to claim needs to balance your current income needs with the impact to lifetime benefits.
Evaluating the Pros and Cons of Retiring at 62
Deciding whether to claim Social Security benefits at age 62 comes down to weighing the pros and cons for your situation:
Pros
- Early income source – Money immediately available for retirement living expenses
- Flexibility – Have free time for travel, hobbies, family
- Bridge to other income – Fund the gap until retirement accounts or pensions kick in
- Fewer years to earn back fees – Benefit reductions have less impact if life expectancy is shorter
Cons
- Lower monthly payments – Up to 30% reduction from full retirement benefit
- Smaller lifetime benefits – Overall income reduced by filing early
- No spousal or survivor benefits – Must wait until FRA if spouse has earned benefits
- May not cover expenses – Need additional income to fund retirement
The choice is a very personal one. If you have limited savings or high debts, the instant income may be necessary to cover your bills in early retirement. Those in good health with many expected retirement years may maximize lifetime payouts by waiting.
Run the numbers for your situation and age 62 benefit amount. While less per month, getting a check right away may still make sense or be necessary for your needs. Just know the trade-offs and long-term impact.
Key Takeaways on Claiming Social Security at 62
Turning 62 sparks an important decision on when to start Social Security. Here are some key points to consider:
- You can claim as early as 62, but benefits are reduced up to 30% for life
- Waiting to claim increases payments up to age 70 through delayed retirement credits
- Evaluate current income needs vs. impact to total lifetime benefits
- No spousal or survivor benefits are available prior to full retirement age
- You have 12 months to withdraw and repay benefits to restart later
- Reductions are permanent – benefits do not increase if you wait past 62
- Understand your full reduction amount before claiming Social Security
Claiming Social Security at 62 provides retirement income right away in exchange for permanently smaller monthly payments. Make an informed decision based on your entire financial situation and retirement timeline. While alluring, signing up at the earliest age could cost you tens of thousands in lifetime benefits.
We’re Here to Help
You do not have to spend hours reading articles on the internet to get answers to your Medicare questions. Give the licensed insurance agents at Manatee Insurance Solutions a Call at (352) 221-3779. You will get the answers you seek in a matter of minutes, with no pressure and no sales pitch. We are truly here to help.
FAQS
How much money will I claim social security benefit if I retire at 62 instead of 65?
The amount of money you will claim as social security benefit will depend on several factors. First, it will depend on your lifetime earnings and the primary insurance amount you are entitled to. Second, it will depend on your retirement age. If you retire at 62 instead of 65, you may receive reduced social security benefits. The reduction in monthly benefits is calculated based on the number of months between your chosen retirement age and your full retirement age. It’s important to note that retiring early may affect your social security benefits for the rest of your life.
What is the full retirement age?
A: The full retirement age is the age at which you can claim your full social security benefits. In the past, the full retirement age was 65. However, it has been gradually increasing and will continue to do so. For example, if you were born in 1960 or later, your full retirement age is 67.
What does it mean to claim social security benefits early?
A: To claim social security benefits early means that you choose to retire and start receiving your benefits before reaching your full retirement age. The earliest age you can start receiving benefits is 62. However, if you claim benefits before your full retirement age, your monthly benefit amount will be reduced.
If you claim early affect my monthly benefit?
Claiming social security benefits early will result in a reduction in your monthly benefit amount in 2023. The reduction is based on the number of months between your chosen retirement age and your full retirement age. The earlier you claim benefits, the greater the reduction will be. For example, if you claim benefits at age 62 instead of your full retirement age of 67, your monthly benefit amount may be reduced by up to 30 percent.
Can I wait to claim my social security benefits?
Yes, you can choose to wait to claim your social security benefits. If you delay claiming benefits beyond your full retirement age, your monthly benefit amount will increase. This is known as a delayed retirement credit. The amount of the increase will depend on your year of birth. For example, if you were born after 1943, your benefit amount will increase by 8 percent for each year you wait to claim benefits, up to age 70.
When can I start collecting social security?
You can start collecting social security as early as age 62. However, as mentioned earlier, if you claim benefits before your full retirement age, your monthly benefit amount will be reduced. It’s important to carefully consider your options and the potential impact on your lifetime benefits before deciding when to start collecting social security.
Should I file for social security early?
Whether or not you should file for social security early depends on your individual circumstances. If you need the income and are unable to continue working, claiming benefits early may be necessary. However, if you can afford to wait and are in good health, waiting to claim benefits may result in a higher monthly benefit amount.
What is the best age to collect social security?
The best age to collect social security will vary for each individual. It depends on factors such as your current financial situation, your health, and your retirement plans. It’s important to consider your own circumstances and consult with a financial advisor before making a decision.
Can I start receiving social security benefits at 62?
Yes, you can begin receiving social security benefits at 62. However, as mentioned earlier, your monthly benefit amount will be reduced if you claim benefits before your full retirement at age 65. It’s important to carefully consider the impact on your lifetime benefits before deciding to start receiving social security at 62.
How does taking social security at 62 affect social security benefits?
Taking social security at 62 will result in a reduction in your monthly benefit amount. The reduction is calculated by Social Security administration is based on the number of months between your chosen retirement age and your full retirement age. The earlier you claim benefits as a retiree, the greater the reduction will be. Additionally, if you continue to work while receiving benefits, your earnings may also affect your social security benefits.
