Should You Take Social Security at Age 62?

You may want to wait longer

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Should you start taking Social Security at age 62? That's the earliest age you can draw your Social Security retirement benefits, and like many people, you may want to take your benefits as soon as you can. Consider this move carefully, though, because if you decide to start benefits at age 62, you'll get a reduced amount of money. That reduction will not only affect you but if you're married, it will also affect your spouse.

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'll likely receive more income over your lifetime by starting your benefits later.

Taking Social Security at 62

Take a look at Carol's situation. If Carol lives to age 84, she can get varying amounts depending on whether she starts Social Security at age 62, 66, or 70. To do the math, multiply your 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's shown above. For example, if Carol starts benefits at 70 and lives to age 94, she'll receive over $423,360 from Social Security, but she would only get $320,640 if she had started at 62.

Below are a few general guidelines you can use to determine whether it makes sense to take Social Security retirement benefits at 62.

Reasons Not to Take Social Security at Age 62

One reason to delay your benefits is that Social Security will withhold part of your benefits if you earn more than the annual Social Security earnings limit. This only applies before your full retirement age of 66 or 67. A portion of your Social Security benefit is withheld and slowly paid back to you once you reach your full retirement age.

As of 2020, during the year you reach full retirement age, Social Security withholds $1 from your benefits for every $3 you earn above $48,600. In 2021, that threshold is $50,520. In the years before you reach full retirement age, it withholds $1 for every $2 you earn above $18,240 in 2020 and $18,960 in 2021.

You may also want to wait if you're single, have little saved for retirement, 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 since you don't have other retirement accounts to draw on.

If your spouse still works and has earned income, a larger portion of your Social Security benefits will be taxed if you start your benefits before your full retirement age. If your income and tax rate will be lower in a few years, you can draw a larger benefit and keep more of it by waiting.

Another consideration is if you're married, 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. If you die before your spouse, they will receive either a percentage of your Social Security benefits or their own, depending on their age and which benefit is larger. This means if you take Social Security at age 62, and your spouse's benefit is based on your benefit, your surviving spouse will receive a significantly reduced benefit.

In general, the longer your life expectancy, the longer you should wait to start drawing on Social Security. You'll receive no benefit, however, from waiting until past age 70 to begin.

Reasons to Take Social Security at Age 62

For most people, the reasons to take Social Security at a later age far outweigh the reasons to take it at 62. There are exceptions, though:

  • Your earned income will be below the annual earnings limit, so your benefits won't be withheld.
  • You have health issues and/or a shorter-than-average life expectancy, and, if married, your spouse has a larger benefit than your own.
  • You have no other accounts to withdraw from and no way to earn income, so you must take Social Security at 62.

Many people underestimate the true worth of their Social Security benefits. By looking at how much you receive over your life expectancy, you'll be able to make an informed decision about whether to take your benefits at age 62.