Planning to retire at 62 and claim Social Security retirement? Know that your retirement benefit will be reduced, and you can lose up to 30% of your benefit. If you are near 62 years of age or have reached the age, you should know its effect on your retirement benefit here.
The Social Security retirement benefits depend on when you claim the benefit, early retirement, full retirement age, or delayed retirement. Retirees who take a delayed retirement at the age of 70 can get additional benefits, too.
The maximum retirement benefit for Social Security recipients is around $2831 per month for early retirees for 2025. The payout amount will increase from January 2026 based on the 2.8% COLA 2026 increase.
How can you calculate your retirement benefit reduction for early retirement?
Americans who have reached 62 years of age, which is before the full retirement age, and if you have claimed the retirement benefits, your benefit will be reduced by up to 30% of the total benefit. The total benefit here means the retirement benefit based on the contribution and your earnings history.
You can calculate the amount of your reduction based on your earnings history and the month before you reach the full retirement age. The Social Security Administration applies the reduction to your early retirement benefit in the following way:
- If the full retirement age is 36 months away, the benefit is reduced by 5/9 of one percent for each month of the payment.
- For an additional month over the 36 months, the benefit is further reduced by 5/12 of 1% per month.
For instance, suppose your reduction months before you reach full retirement age is 56 months; for 36 months, the benefits will be reduced by 5/9 of 1% for each month, plus 20 months times 5/12 of 1%. The reduction in the benefit payment will be for life as long as you live.
What else will be affected by the early retirement?
If you claim the retirement benefit from the Social Security Administration at 62 years of age, not only is your benefit reduced as you gradually receive the benefit, but it will affect the following things as well:
- Your early benefit can impact the spousal benefit, as it depends on your benefit, so if something happens to you, your spouse will receive the reduced benefit too.
- Your lifetime income will be reduced, as you will receive the reduced retirement benefit, which can affect your finances at the age of 80 or 90.
- Medicare starts at the age of 65 or above, so if you take early retirement, you will need to cover your healthcare costs until you reach the threshold age.
- The Social Security Administration adjusts the benefit amount every year based on the Cost-of-Living Adjustment calculator; however, if you claim early, you may receive a smaller amount even if the COLA increases the benefit.
What if you are working after claiming benefits at age 62?
If you have claimed the retirement benefit at the age of 62 and continued working, you should know, your benefit will be affected if your earnings exceed a certain limit. The earning limit for 2025 is $23,400 for retirees working after claiming the benefit.
So, according to the SSA, if you worked after claiming retirement benefits and earned more than the limit, you will lose $1 of the benefit for every $2 you earned. However, once you reach your full retirement age, there will be no earning limit, and it will no longer affect your benefit payment.
If you are working and receiving the retirement benefit, the benefit can be counted in your taxable income if your combined income exceeds the tax threshold.
How to decide at what age you should claim your retirement benefit?
The early retirement claim can affect your benefit very much, but it is great if you are suffering from some illness or have not much time to live, or you don’t have money. However, if you can manage or have some income, it’s better to wait till full retirement age or better till 70 to get the full advantage of the social security benefit.
You must understand how claiming the benefit early can affect your benefit in the long run. You can use the SSA calculator to know your loss and see at what age you can claim your retirement benefit, maximizing your benefit.
The Social Security Administration does allow retirement benefits at 62 years of age, but it does not mean you have to claim them by then; you can wait till full retirement age to get 100% of your benefit.
Disclaimer: Social Security retirement information is for general awareness only. Verify eligibility and benefits with the SSA.
