info@abacus-wealth.com
Is Starting Your Social Security Income at 62 a Good Idea?
Author: Joel Barretto, CFP®
March 24, 2026
Key Insights
- Claiming Social Security at age 62 results in a permanent reduction in monthly benefits.
- Early claiming may provide immediate income but can reduce total lifetime benefits, especially for those with longer life expectancies.
- Delaying benefits increases monthly income through delayed retirement credits, enhancing long-term financial security.
- Higher lifetime benefits can be particularly valuable for married couples, especially in maximizing survivor benefits.
- Retirees should plan for healthcare costs before Medicare eligibility at age 65.
- Continuing to work before full retirement age may reduce benefits due to earnings limits.
Most people who decide to retire early may be retired for another 30 to 40 years as healthier lifestyles and modern medicine have boosted longevity over the years. There are a lot of factors (e.g., inflation, nest egg savings returns, investment risk, health care costs, etc.) to consider in trying to determine whether your retirement income will last your lifetime, especially when you are no longer capable of being productive in your later years.
Those who decide that taking Social Security income at an early age should first consider the disadvantages of such an important decision. Starting U.S. Social Security benefits at age 62—the earliest possible age—results in a permanent reduction of your monthly income and potential restrictions on your ability to work while receiving benefits.
Key Disadvantages
Permanent Benefit Reduction:
- If your Full Retirement Age (FRA) is 67 (for those born in 1960 or later), claiming at 62 results in a 30% permanent reduction in your monthly benefit.
- For example, a benefit that would be $2,000 at age 67 drops to approximately $1,400 if started at 62.
Lower Lifetime Total for Longevity:
- While you receive more checks over your lifetime by starting early, the “break-even” age is typically around 78 to 83 years old.
- If you live past this point, you will have received significantly less total money than if you had waited until your FRA or age 70.
Earnings Limit Penalties:
- If you continue to work while receiving benefits before your FRA, the Social Security Administration (SSA) will deduct $1 for every $2 you earn above a set annual limit ($23,400 in 2025).
- Once you reach your FRA, these limits no longer apply, and your benefit is recalculated to eventually return those withheld funds.
Reduced Survivor Benefits:
- By claiming early, you lock in a lower benefit amount that may eventually limit the survivor benefit available to your spouse if you pass away first.
Smaller Cost-of-Living Adjustments (COLA):
- Because COLA increases are based on a percentage of your monthly benefit, starting with a lower base amount at age 62 means your annual dollar increases will also be smaller over time.
Lack of Medicare Coverage:
- Medicare eligibility does not begin until age 65, leaving a three-year gap where you must fund your own private health insurance if you retire fully at 62.
If you were born in 1960 or later, waiting until age 70 to claim Social Security significantly increases your monthly benefit compared to claiming at age 62. This increase happens in two stages: avoiding the early filing penalty and earning delayed retirement credits.
Comparison of Monthly Benefit Levels
For someone with a Full Retirement Age (FRA) of 67, here is how the monthly check changes based on a hypothetical $1,000 baseline benefit at age 67:
- Claiming at 62: $700 (a permanent 30% reduction).
- Claiming at 67 (FRA): $1,000 (100% of your earned benefit).
- Claiming at 70: $1,240 (a 24% increase over your FRA amount).
The age 70 benefit is roughly 77% higher than the age 62 benefit ($1,240 vs. $700).
Break-Even Analysis
While waiting until 70 results in a much larger check, you “miss out” on eight years of payments (62 to 70).
- The Break-Even Age: Most retirees reach the “break-even” point—where the total cumulative money from waiting until 70 surpasses the total money from starting at 62—at approximately age 80 to 81.
- Longevity Factor: If you expect to live past your early 80s, waiting until 70 typically maximizes your lifetime Social Security income.
Visualizing the Growth (Age 62 to 70)
Additional Considerations for Age 70
- Guaranteed Returns: The 8% annual increase between age 67 and 70 is a guaranteed increase that does not depend on stock market performance.
- Spousal Protection: If you are the higher-earning spouse, waiting until 70 ensures the highest possible Survivor Benefit for your partner.
- No Credit After 70: There is no benefit to waiting past age 70; Delayed Retirement Credits stop accruing once you reach that age.
The bottom-line is that everyone’s situation or reasons for taking social security income at an early age will vary. Having a comprehensive financial plan that takes a lot of other factors into consideration will help you justify or bulletproof such an important irreversible decision.
Disclaimer:
- The information provided is for educational purposes only and does not constitute personal financial, tax or investment advice and should not be relied on as such. It does not take into consideration any investor’s particular investment objectives, strategies, time horizon, and tax or legal status. Abacus Wealth International (AWI) does not provide tax or legal advice. Please consult a tax or legal professional for corresponding tax and legal advice.
- All material and content have been obtained from sources believed to be reliable. AWI does not guarantee the accuracy of the information provided and shall not be held liable for decisions based on the foregoing information.
- All examples of graphs, financial products and historical returns contained in the foregoing material are for illustration and educational purposes only and shall not be deemed as financial advice or recommendation. Past performance is not indicative of any future investment returns.