If you’ve been working for decades, retiring at 62 might sound like a dream. You’re probably thinking: “I’ve earned this. Why not start enjoying life now?” And yes, in the United States, you can start collecting Social Security benefits at 62, but it comes with a few strings attached.
The Social Security Administration gives people the option to start early, but there’s a trade-off. You’ll get your benefits sooner, sure, but they’ll also be smaller, permanently. And that’s something you want to think through carefully.
Your full retirement age is probably somewhere between 66 and 67, depending on when you were born. If you wait until then, you get your full benefit. Start early, and you’re looking at up to 30% less every month. That can add up to a lot of money over time.
Is 62 years old the right time to retire?
For some people, absolutely. For others, it might be better to wait. Let’s keep it simple and look at what retiring at that age could really mean for your wallet :
Well, it depends on how much you were earning before you stopped working. If you made about $30,000 a year, your monthly check would be around $787, that’s about $9,444 a year. Made $50,000? You’d get roughly $1,051 a month, or $12,616 annually. And if you were earning $150,000, your check could be around $2,196 a month, just over $26,000 a year.
Bottom line? The more you made during your working years, the more you’ll get in retirement, but starting early at 62 means taking home a smaller slice of your full benefit. Keep in mind, this is the reduced amount you’d get for life if you claim at 62. It Sounds Good, but there’s a lot to consider.
What are you giving up by starting early?
Let’s say your full retirement benefit is $2,000 a month at 67. If you start at 62, you’d only get about $1,400 a month. That’s $600 less, every single month, for the rest of your life. Over one year, that’s $7,200. Over 20 years? That’s $144,000 left on the table.
Now, if you need the money right away, that’s a different story. Maybe you’re just ready to stop working, or maybe you simply can’t keep going. And that’s completely understandable. But if you do have the chance to wait a little, even just a couple of years, it could really boost what you get later on.
Waiting Has Big Benefits (Literally)
Here’s the cool part: if you wait even a year or two, your check gets bigger. And if you hold off until 70, you could be getting the max, and that extra cash can really help as the years go on.
Here’s what your monthly benefit might look like if you wait: Retire at 64: You get about 80% of your full benefit. Retire at 66: You get about 93%. Wait until 70: You get 100%, plus a little bonus for waiting
being patient can really pay off, especially if you’re feeling healthy and have a little savings or side income to help you coast for a while.
What should you do now?
Well, everyone’s situation is different. But, here are a few simple steps to help you start figuring out what might work best for you:
Log in to the Social Security site and see your benefit estimates
Check the numbers for claiming at 62, 66, or 70 – the difference might surprise you
Not sure what makes sense? Chat with a financial advisor (it’s totally worth it)
Think about your health, your savings, and what kind of retirement you actually want
Social Security is one huge part of your retirement picture, sure, but what matters most is choosing what works best for you, not just for today, but for the years ahead.