Should You Take Social Security at Age 62?

Here's What You Need to Know Before Starting Social Security at Age 62

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Should your start taking Social Security at age 62? Many people do. Age 62 is the earliest age you can begin drawing on your Social Security retirement benefits, and like many people, you are probably inclined to start drawing benefits as soon as you can. But that might be a big mistake.

You will take a reduced amount if you start benefits at age 62. That reduction will not only affect you, if you are married, it will also affect your spouse.

So, unless you meet a few clear-cut criteria, you'll want to give the idea of taking Social Security at age 62 quite a bit of thought before you apply for benefits. Unless you have a critical illness, you are likely to receive more income over your lifetime by starting your benefits at a later age.

Example

Let's look at an example using Carol. If Carol lives to age 84, here is how much she can get depending on whether she starts Social Security at age 62, 66, or 70. To do the math, multiply the monthly benefit amount times twelve months times the number of years expected to receive benefits.

  • Age 62: $835 × 12 × 22 = $220,440
  • Age 66: $1,114 × 12 × 18 = $240,624
  • Age 70: $1,470 × 12 × 14 = $246,960

Carol gets more total income by waiting until age 70 to begin benefits. If Carol lives longer, the age 70 plan works even better for her than what is shown above. For example, if Carol lives to age 94, she'll receive over $423,360 from Social Security if she starts benefits at 70, but would only get about $320,000 total if she had started at 62.

Below are a few general guidelines you can use to determine when it makes sense for you to start taking Social Security.

Reasons Not to Take Social Security at Age 62

  • You plan on continuing to work and you will earn in excess of the annual Social Security earnings limit prior to reaching your full retirement age (FRA). (A portion of your Social Security benefits are withheld if you are collecting benefits before FRA and earn more than the annual earnings limit. The withheld amount is slowly paid back to you once you reach FRA.)
  • You are single, have little savings, and have a longer life expectancy. In this situation, you should consider working as long as possible to maximize your benefits and waiting as long as possible (up to age 70) to begin your benefits.
  • Your spouse is still working and has earned income which may cause a larger portion of your Social Security benefits to be taxed. If your income, and tax rate, will be lower in a few years, by waiting to collect Social Security you can draw a larger benefit and keep more of it.
  • You have a long life expectancy. In general, the longer your life expectancy, the longer you should wait to begin drawing on Social Security. There is no benefit, however, to waiting until past age 70 to begin.
  • You are married, and your spouse's benefit is smaller than yours, and/or your spouse is much younger than you. When married, your combined life expectancy will be longer than either of you as a single person. Upon your death, your spouse will continue to receive the larger of your Social Security benefits, or their own, but not both. This means if you take Social Security at age 62, and your spouse's benefit is based upon your benefit, it will mean a significantly reduced benefit for your surviving spouse's lifetime.

    Reasons to Take Social Security at Age 62

    • You will not have earned income in excess of the annual earnings limit between age 62 and full retirement age.
    • You have health issues and/or a shorter than average life expectancy, and, if married, your spouse's benefit is larger than your own.
    • You have no other accounts to withdraw from and have no way to earn income, so you must take Social Security at 62.

    For most people, the reasons to take Social Security at a later age far outweigh the reasons to take it at 62.

    Many people underestimate what their Social Security benefits are really worth. By looking at how much you can get over your life expectancy, you'll see you can often get a larger amount by starting benefits later than age 62.