What happens if you stop working at 62 but don t collect until full retirement age?

If you stop working at 62 but delay collecting Social Security until your Full Retirement Age (FRA), your monthly benefit amount will be calculated based on your highest 35 years of earnings, but you won't get the Delayed Retirement Credits you'd earn for each month you wait past your FRA, potentially leaving money on the table unless you were already earning low wages in those later years, which could then be replaced by zero-earning years. The main effect is that your benefit will be determined by your earnings record up to that point, and you miss out on the significant increase for waiting, but you also avoid the penalty for claiming early.

Can I retire at 62 but wait to collect Social Security?

We base your basic Social Security benefit — the amount you would receive at your full retirement age — on your lifetime earnings. However, the actual amount you are entitled to each month depends on when you start to receive benefits. You can start your retirement benefit at any point from age 62 up until age 70.

Can I stop working but not retire?

Sure. There is no law that states that you must retire; remember, retirement is an option.

What happens to retirement if you stop working?

For most of these individuals, they will continue to receive their full pension and benefits but their pay may be reduced by the amount of their pension. In other cases, their pension will be stopped completely and they will be covered as just a regular employee.

How much do you lose if you retire at 62 instead of 67?

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. Starting to receive benefits after normal retirement age may result in larger benefits. With delayed retirement credits, a person can receive his or her largest benefit by retiring at age 70.

What happens to my Social Security if i stop working at 62?

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 are the downsides of 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. 

What happens if I stop working before retirement age?

Early retirement

Some people will stop working before age 62. But if they do, the years with no earnings will probably mean a lower Social Security benefit when they decide to start receiving benefits. Sometimes health problems force people to retire early.

What are the biggest mistakes people make when retiring?

5 retirement mistakes to avoid

• Lacking a life plan. Retirement is a difficult journey to travel without a map. ...
• Overspending. ...
• Claiming Social Security too early. ...
• Being overly conservative with investments. ...
• Retiring too early.

What is the $1000 a month rule for retirement?

The $1,000 a month retirement rule is a simple guideline stating you need about $240,000 saved for every $1,000 of monthly income you want from your investments in retirement, based on a 5% annual withdrawal rate ($240k x 0.05 / 12 = $1k/month). It's a motivational tool to estimate savings goals (e.g., $3,000/month needs $720k), but it's one-dimensional, doesn't account for inflation, taxes, or other income like Social Security, and assumes steady 5% returns, making a personalized plan essential. 

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 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.

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. 

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.

What happens if I retire but delay Social Security?

Social Security retirement benefits are increased by a certain percentage for each month you delay starting your benefits beyond full retirement age. The benefit increase stops when you reach age 70.

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?

Retirement Regrets: Top 15 Things Retirees Wish They Had Done Differently

• Plan More Carefully for the Fun You Want to Have in Retirement. ...
• Not Saving Enough. ...
• Not Retiring Earlier. ...
• Not Planning Adequately for Healthcare. ...
• Staying Uninformed About Personal Finance. ...
• Invest Too Conservatively — or Too Aggressively.

What is the 3 rule for retirement?

The "3% Rule" for retirement is a conservative withdrawal guideline suggesting you take out no more than 3% of your initial retirement savings in the first year, then adjust for inflation annually, aiming to make your money last longer than the traditional 4% rule, especially useful for early retirees or those wanting extra safety from market downturns and inflation. Another "rule of thirds" strategy suggests dividing savings into three parts: one-third for guaranteed income (like an annuity), one-third for growth, and one-third for flexibility. 

Why wait until full retirement age?

If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase. If you start receiving benefits early, your benefits will be reduced a small percentage for each month before your full retirement age.

What is the biggest mistake most people make regarding retirement?

The top ten financial mistakes most people make after retirement are:

• 1) Not Changing Lifestyle After Retirement. ...
• 2) Failing to Move to More Conservative Investments. ...
• 3) Applying for Social Security Too Early. ...
• 4) Spending Too Much Money Too Soon. ...
• 5) Failure To Be Aware Of Frauds and Scams. ...
• 6) Cashing Out Pension Too Soon.

Does Social Security increase after 62 if you stop working?

Your PIA amount will not increase. However, the longer you delay the start of benefits, the higher your monthly benefit amount will be. Without continued work, your Social Security benefit amount will be based on your existing work history.

Is it better to take early retirement or resign?

Or rather than quitting your job, you might want to reduce your hours until you can fully retire. Deciding to retire early isn't a bad idea. But if you're not careful, you may end up regretting that you didn't work longer. So make sure to think through your decision carefully – and plan ahead.

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

Claiming early applies an actuarial reduction to your PIA: a 5/9 of 1% cut for each of the first 36 months before full retirement age, and 5/12 of 1% for additional months. For someone whose full retirement age is 67, starting benefits at 62 is 60 months early. This translates to a 30% permanent reduction in benefits.

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."

Why shouldn't I retire at 62?

When it comes to determining if 62 is the right retirement age for you, a big factor in the decision is your financial picture. Retirement can easily last more than twenty years, and if you retire at 62, you'll get about a 30% reduction in your Social Security payments throughout your lifetime.