Taking Social Security is the ultimate retirement give-and-take, at least from a financial point of view.
On the upside, cashing in on Social Security at age 62, the earliest age for working Americans, gives you a reliable (for now) monthly cash pipeline for the rest of your life. On the downside, taking Social Security early also means the monthly check will be significantly lower than if you wait until full retirement age or later.
Know your max number at age 62
In 2026, the most you can collect from Social Security at age 62 is $2,969.“That number is calculated based on your earnings each year over the last 35 years,” John Moran, certified financial planner at Domain Money, told NTD News. “In order to collect this maximum, you would have to earn above the taxable wage cap each year, which was $184,500 in 2026.”
Know the ‘now versus later’ numbers
Before you take Social Security early, know that each year after age 62, up to 70, your Social Security benefit increases.“By taking your benefit at 62, that will be the least you’re eligible to collect and reduce your net benefits collected over the long term,” Moran noted. “Your full Social Security benefit is calculated based on your Full Retirement Age.”
For Americans born after 1960, the full retirement age is 67. “If you retire early, your benefit is reduced by 5/9 of 1 percent for each month prior to your Full Retirement Age,” Moran said. “The difference adds up to a 30 percent permanent reduction in your social security check.”
Here’s where taking Social Security early can make good sense
There are a few realistic scenarios where taking Social Security payouts at age 62 works in your financial favor.“If your health isn't great and you're not expecting to live into your 80s, waiting just doesn't pay off mathematically,” Yuri Nosenko, financial adviser at Imperial Fund Wealth Management, told NTD. “The break-even point is usually somewhere around 78-80, so if that's not realistic for you, take the money now.”
Don’t Look at Social Security as a ‘Yes or No’ Decision
Financial planning experts view the decision about Social Security age payouts as tied to income sustainability because retirement income matters most.“Social Security isn’t just income, it’s a foundation,” Jeff Herman, founder and investment adviser at The Jeffrey Group, told NTD. “It’s the closest thing many people have to a pension, and the stronger that foundation is, the more flexibility you have with the rest of your portfolio.”
Consequently, if you don’t need the income at 62, it’s worth thinking carefully before taking it. “Because once you make that decision, it’s permanent,” Herman said.