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.
- You can begin withdrawing from Social Security at age 62, but there are some good reasons to wait.
- Your benefits will be reduced until your full retirement age if you make more than the annual earnings limit.
- If your benefits won't be reduced, or if you don't have any other accounts to withdraw from, you might need to begin withdrawing at age 62.
Taking Social Security at 62
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.
For example, let's say that you live to age 84. You can get varying amounts, depending on whether you start Social Security at age 62, 66, or 70. To do the math, multiply your monthly benefit amount times 12 months, then multiply that by the number of years you expect 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
You get more total income by waiting until age 70 to begin benefits. If you live longer, the age 70 plan works even better for you than the examples above.
For instance, if you start your benefits at 70 and live to age 94, you'll receive $423,360 from Social Security. If you'd started at 62, you'd only get $320,640.
In general, the longer your life expectancy, the longer you should wait to start drawing Social Security.
Below are a few general guidelines you can use to determine whether it makes sense to take Social Security retirement benefits at age 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 after you reach your full retirement age.
As of 2022, during the year you reach full retirement age, the Social Security Administration (SSA) withholds $1 from your benefits for every $3 you earn above $51,960.
There is no reason to wait until you're past the age of 70 to begin drawing Social Security.
In the years before you reach the year you turn full retirement age, the SSA withholds $1 for every $2 you earn above $19,560 (in 2022).
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; then, wait as long as you can (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 before your full retirement age.
Another consideration is if you're married, your spouse's benefit might be smaller than yours, and/or your spouse is much younger than you. When married, your combined life expectancy will be longer than either of yours as a single person.
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.
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 pass away a few years later, and if your spouse's benefit is based on yours, they will receive a significantly reduced benefit.
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 value 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.