What happens if you retire at 62 instead of 65?

Retiring at 62 instead of 65 means you'll get permanently reduced Social Security benefits, potentially up to 30% less, because you're claiming them earlier than your Full Retirement Age (FRA), which is 67 for most people born after 1960. While you get more years of payments, the monthly amount is lower, impacting future cost-of-living adjustments (COLAs) and your overall lifetime income, though you can bridge gaps with other savings and potentially healthcare costs before Medicare at 65.

How much money will I lose if I retire at 62 instead of 65?

If a worker begins receiving benefits before his/her normal (or full) retirement age, the worker will receive a reduced benefit. A worker can choose to retire as early as age 62, but doing so may result in a reduction of as much as 30 percent.

Is it better to retire at 62 than 65?

Retiring at 62 means earlier, but reduced, Social Security benefits; retiring at 65 (or Full Retirement Age - FRA) offers significantly higher monthly payments and Medicare access, but you'll wait longer for checks; the "better" choice hinges on your health, savings, life expectancy, and spouse's income, with 62 good for immediate needs or poor health, while 65+ benefits long-term security for healthier individuals, often with a break-even point around 80, notes. 

Is Social Security taxed at age 62?

Yes, Social Security benefits can be taxed at age 62, but it depends on your total income, not your age; if your combined income (including half your benefits, wages, interest, and other taxable sources) exceeds IRS thresholds, up to 85% of your benefits may be subject to federal tax, and some states also tax benefits. If Social Security is your only income, you likely won't pay taxes on it, but if you have other retirement funds (like a 401(k) or IRA) or work part-time, taxes can apply. 

What happens if you select to retire at age 62?

Early retirement

However, we'll reduce your benefits if you start receiving them before your full retirement age. For example, if you turn age 62 in 2025, your benefit would be about 30% lower than it would be at your full retirement age of 67.

What happens if you retire at 62 instead of 65?

How many hours am I allowed to work if I retire at 62?

You can work as many hours as you want at age 62, but your Social Security benefits might be reduced until you reach your Full Retirement Age (FRA), typically 67; after FRA, there are no earnings limits, and you can work full-time without affecting benefits, though high earnings can make benefits taxable. The key factor is your income relative to the annual limit (e.g., ~$23,400 in 2025), not hours, as earnings over the limit reduce benefits dollar-for-dollar before FRA, but this is temporary and recalculated later. 

What is the downside to taking Social Security at 62?

The primary disadvantage of claiming Social Security at age 62 is a permanently reduced monthly benefit, potentially by up to 30%, because you're taking it at the earliest possible time, not your Full Retirement Age (FRA), which is usually 67 for those born after 1960. This smaller base amount also leads to smaller future Cost-of-Living Adjustments (COLAs), meaning your benefit grows less over time, and it can impact spousal/survivor benefits, limiting your lifetime income potential significantly. 

How much money can you make at 62 and still draw Social Security?

At age 62, you can earn up to the annual limit (e.g., $24,480 in 2026) and get full benefits; earning more results in a $1 reduction for every $2 over the limit, but these withheld benefits are restored later, and once you hit your Full Retirement Age (FRA), there's no limit on earnings, and you receive your full Social Security amount. 

What is the best age to retire?

“Most studies suggest that people who retire between the ages of 64 and 66 often strike a balance between good physical health and having the freedom to enjoy retirement,” she says. “This period generally comes before the sharp rise in health issues which people see in their late 70s.

What is one of the biggest mistakes people make regarding Social Security?

Claiming Benefits Too Early

One of the biggest mistakes people make is claiming Social Security benefits as soon as they're eligible, which is at age 62. While getting money sooner can be tempting, claiming early has a significant downside: your monthly benefit will be reduced.

Is retiring at 62 a mistake?

Just because you are already eligible to apply for Social Security at 62 does not mean you should. If you start taking benefits at age 62 will get you about 25% less than what you would get on your full retirement age of 66. You will also get 32% less than if you wait until age 70.

What is the smartest age to retire?

There's no single "smartest" age, but 65-67 is a common sweet spot for maximizing benefits (full Social Security, Medicare eligibility), while many Americans think 63 is ideal but often retire around 62-64 due to health or finances. The truly best age depends on your financial security, health, lifestyle goals, and desire to work, with some experts suggesting delaying Social Security to 70 for maximum payout, making late 60s a financially optimal time to retire, even if you start earlier. 

Does Dave Ramsey recommend taking Social Security at 62?

Ramsey says it's fine to collect benefits as early as age 62 — something most financial experts advise against — if you take your checks and invest them.

How much do you have to make to get $3,000 a month in Social Security?

To get around $3,000/month in Social Security, you generally need a high earning history, around $100,000-$108,000+ annually over your top 35 years, but waiting to claim until age 70 maximizes this amount, potentially reaching it with lower yearly earnings, say under $70k if you wait long enough, as benefits are based on your highest indexed earnings over 35 years. The exact amount depends heavily on your specific earnings history and the age you start collecting benefits. 

What is the biggest retirement regret among seniors?

Not Saving Enough

If there's one regret that rises above all others, it's this: not saving enough. In fact, a study from the Transamerica Center for Retirement Studies shows that 78% of retirees wish they had saved more.

What does Suze Orman say about taking Social Security at 62?

Orman explained that you can start Social Security as soon as 62, but that you shouldn't. She said: "Don't settle for a reduced Social Security benefit. If you are in good health, the best financial move you can make is to not claim Social Security before you reach your full retirement age."

Can I live off $5000 a month in retirement?

To retire comfortably, many retirees need between $60,000 and $100,000 annually, or $5,000 to $8,300 per month. This varies based on personal financial needs and expenses.

What is the number one mistake retirees make?

The 10 Biggest Retirement Mistakes to Avoid

1. Underestimating Your Retirement Needs. ...
2. Ignoring Tax Diversification. ...
3. Improper Asset Allocation.
4. Neglecting Healthcare Planning. ...
5. Poor Social Security Timing. ...
6. Inadequate Risk Management. ...
7. Overlooking Estate Planning. ...
8. Not Planning for Long-term Care.

What is the healthiest retirement age?

The healthiest age to retire isn't a single number, but research suggests a "sweet spot" between 65 and 67, balancing financial security (Medicare, full Social Security) with continued mental/social engagement, as delaying retirement can boost longevity, though early retirement (early 60s) is fine if financially sound and health supports it, while very physically demanding jobs might benefit from earlier retirement for better health outcomes. 

Can I collect Social Security at 62 and still work part time?

Yes, you can draw Social Security at 62 and work part-time, but your benefits will be reduced if your earnings exceed the annual limit for those under full retirement age (FRA). For 2025, if you are under FRA, the limit is $23,400, with $1 deducted for every $2 earned over that. Once you reach your full retirement age (67 for those born in 1960 or later), your earnings no longer affect your benefits, and past reductions are recalculated to increase your monthly payment. 

Can you beat Social Security by claiming at 62?

If you claim Social Security at age 62, rather than wait until your full retirement age (FRA), you can expect up to a 30% reduction in monthly benefits. For every year you delay claiming Social Security past your FRA up to age 70, you get an 8% increase in your benefit.

Do I pay taxes on Social Security?

You will pay federal income taxes on your benefits if your combined income (50% of your benefit amount plus any other earned income) exceeds $25,000/year filing individually or $32,000/year filing jointly. You can pay the IRS directly or withhold taxes from your payment.

What is the smartest age to collect Social Security?

The "smartest" age to collect Social Security varies, but age 70 is often statistically best for maximizing lifetime benefits, as monthly checks grow significantly until then, especially for higher earners and those expecting long lives; however, claiming at Full Retirement Age (FRA) (67 for most) secures 100% of benefits, while taking it as early as 62 provides income sooner but permanently reduces payments, making it ideal for those with immediate financial needs or shorter life expectancies. 

Why do most people take Social Security at 62?

The most obvious reason to claim Social Security benefits early is if you think you won't be receiving benefits for many years. “If you know how long you're going to live, the conversation would be a lot easier,” Wolk says. Someone who knows they will die at age 65 will undoubtedly want to start benefits at age 62.

How much is your Social Security reduced if you take it at 62?

Starting Social Security at age 62 reduces your monthly benefit by up to 30% compared to your Full Retirement Age (FRA), typically 67, with the exact reduction depending on months filed early, as it's calculated as 5/9 of 1% per month for the first 36 months, then 5/12 of 1% for each extra month, permanently lowering payments for life.