Planning to Claim Social Security at 62? Here's What Every Future Retiree Should Know

Understanding the Real Cost of Early Benefits

The moment you reach age 62, you become eligible to apply for Social Security retirement benefits or spousal benefits. However, eligibility and smart claiming are two different things entirely. Before you submit your application, it’s crucial to understand how the Social Security Administration’s policies could significantly impact your monthly income and long-term financial security.

The most important fact: claiming Social Security early comes with substantial penalties. If you decide to collect retirement benefits at 62 instead of waiting until your full retirement age (FRA), your monthly checks will be permanently reduced by as much as 30%. For those considering spousal benefits, the reduction can reach up to 35%. Your full retirement age depends on your birth year—if you were born in 1960 or later, your FRA is 67.

The penalty structure works month-by-month. Each month you delay your claim before reaching FRA reduces the early claiming penalty incrementally. Once you hit your FRA, you qualify for your full monthly benefit based on your complete work history. If you can afford to wait even longer, there’s another incentive: delayed retirement credits. By postponing your application beyond FRA until age 70, your benefit grows by approximately 2/3 of 1% monthly, or roughly 8% annually.

This doesn’t mean claiming at 62 is universally wrong. For individuals with limited life expectancy or those facing hardship without immediate income, it may be the right call. But if you expect a longer retirement or have other income sources available, waiting could result in substantially higher lifetime benefits.

The Hidden Threat: How Work Income Reduces Your Benefits

Here’s a rule that catches many people off guard: the Social Security earnings test. This regulation applies specifically to those who claim benefits before their FRA while continuing to work. If your employment income exceeds a certain threshold, the Social Security Administration will withhold portions of your benefits.

For 2026, the threshold is set at $24,480 annually. Exceed this amount, and you lose $1 in benefits for every $2 you earn above that limit. This could theoretically eliminate your entire monthly check depending on how much you earn from your job and the size of your benefit.

The good news? This money isn’t permanently lost. When you eventually reach your FRA, the Social Security Administration recalculates your benefit to account for all the money that was previously withheld. However, this provides little immediate relief when you need income to pay monthly bills.

Your options if you anticipate this situation include: reducing your work hours to stay under the earnings threshold, working more hours to compensate for the withheld benefits, or reconsidering your claiming timeline altogether until you either retire completely or reach your FRA.

Timing Matters: Know Your Actual Benefit Start Month

The Social Security Administration has a specific rule about eligibility timing that surprises many applicants. You must be 62 for the entire calendar month to receive benefits in that month. The catch? The agency uses an unusual definition of “the entire month.”

If your birthday falls on the 1st or 2nd of a month, you become eligible for benefits in the month you turn 62. However, if you were born on any day from the 3rd through the 31st, your first eligible month is actually the month after your birth month.

Consider this example: someone born on March 2nd can claim March benefits. But someone born on March 3rd won’t be eligible until April (with the payment processed in May). This distinction matters significantly when planning your annual budget and cash flow.

Because you can apply for Social Security up to four months before your desired benefit start date, it’s wise to apply well in advance. This provides a buffer in case any processing complications arise.

Making Your Decision: From mysocialsecurity.com to Action

Before you make your claiming decision, evaluate the timing at multiple ages. The difference between claiming at 62, your FRA, or waiting until 70 could amount to tens of thousands of dollars over your retirement. Consider consulting your records on mysocialsecurity.com, where you can estimate benefits at different claiming ages and see your complete earnings history.

Factor in your personal circumstances: your health outlook, other retirement income sources, spousal situation, and current employment status. Each scenario creates a different optimal claiming age. While there’s no universal “right” answer, there are strategies that work better than others based on your specific situation.

Taking time to understand these three critical factors—the permanent penalty for early claiming, the earnings test that may further reduce your benefits, and the specific timing rules for your birth month—ensures you’re positioned to make a confident decision that maximizes your lifetime Social Security benefits.