Three 'Must Do' Financial Moves When Taking Social Security at Age 62

By law, you only have one chance to undo the decision to apply for Social Security benefits.

Published: 7/23/2026, 2:53:21 PM EDT

Three 'Must Do' Financial Moves When Taking Social Security at Age 62 — People worried about having enough money for retirement. (Shutterstock)

Americans may not wind up retiring early, but many do opt to take Social Security funds as early as possible, at age 62. According to federal government figures, the latest Social Security Administration data show that about one in four Americans who begin receiving retirement benefits claim at age 62, the earliest age they're eligible. That’s about 26 percent of all eligible Americans, the SSA noted.

If you’re considering taking Social Security, there are a few key factors to weigh and also several critical strategies to deploy before claiming an SSA payout.

For starters, when you start withdrawing Social Security at age 62, instead of at your full retirement age, you’ll face a 30 percent reduction in monthly benefits if you stick with an FRA claiming strategy. (Full retirement age is the age at which you're entitled to receive 100 percent of your Social Security retirement benefit, also called your primary insurance amount (PIA, based on your lifetime earnings record and determined by your year of birth, which is not the same for everyone.)

Here's a "dollars and sense" example. Let’s say you delay taking Social Security until age 67, your full retirement age. Let’s also say by doing so, you’ll earn approximately $2,000 a month from Social Security. In contrast, if you started taking SSA funds at age 62, you’ll receive only $1,400 a month. If you waited until age 70 to claim Social Security, the last age you can do so according to the SSA, your monthly benefits rise by another 24 percent for a $2,840 monthly total benefit.

Additionally, you’ll need to factor in your annual cost-of-living adjustment (COLA), which is based on your total SSA payout. If you start taking Social Security at 62 and begin that journey with lower cash benefits, your COLA-adjusted benefits will be lower, as well.

“Claiming Social Security at 62 gets you cash flow sooner and can let your other retirement savings stay invested longer, but it comes at a steep price: your benefit is permanently reduced by up to 30 percent for life,” Margie Glenn, a financial adviser at Moneta, told NTD News. “It's not a decision you get to unwind once the years pass.”

Three Strategies to Use Before Taking Social Security at age 62

When mulling over an early Social Security claiming age, don’t sign on the dotted line until you’ve got these three bases covered.

Run the numbers

Before claiming Social Security, run a break-even analysis with your adviser comparing lifetime benefits at 62 versus waiting. "Most people cross over in their late 70s or early 80s," Glenn said.

Make sure to factor in your health, whether you're still working (earnings above $24,480 in 2026 will temporarily reduce your check), and how the timing affects a spouse's future survivor benefit. "We see this issue as a household decision, not just an individual one," Glenn noted.

If you’re still working at ag 62, or plan to, factor in SSA withholding amounts

There's another issue related to working while receiving Social Security benefits.

Before reaching full retirement age, Social Security may withhold some of your monthly benefit checks due to excess earnings above a certain threshold called the annual earnings test limit.

“Although withholding does not necessarily result in the permanent loss of those withheld benefits, because some of your withheld benefits do get added back into your total benefit after you reach your full retirement age,” Evan Farr, a certified elder law attorney and retirement planner at Farr Law Firm, P.C., told NTD. “Note this is a very complex calculation and it doesn't mean you automatically get back all of your lost benefits.”

Consequently, claiming Social Security early while working a high-paying job may lead to little to no immediate cash flow and the negative consequence of reducing your monthly Social Security benefit for the remainder of your life.

“That’s why it’s a good idea to determine if your employment income will cause Social Security to withhold part of your benefit check due to exceeding the earnings test limits,” Farr said. “Also determine how much actual income you expect versus the benefit listed on your Social Security statement.”

Get good professional advice

Additionally, Glenn recommends meeting with a trusted financial adviser and asking four important questions

What's my personal break-even age?
How does this affect my spouse's survivor benefit?
Will working reduce what I actually receive?
And could delaying, even by living off savings for a few years, significantly grow my check for the rest of my life?

Your adviser can also work with you on the numbers side of the age 62/Social Security decision.

“Here, you can model the cumulative cash flows associated with delaying claiming Social Security until full retirement age or age 70, including federal income tax withholding on those benefits, the timing of withdrawals from other sources of income, how long you anticipate living and the effects on inflation and the potential impact on a surviving spouse,” Farr said.

It’s Tough Going Back on a Social Security Age Decision

By law, you only have one chance to undo the decision to apply for Social Security benefits, so think long and hard about taking Social Security at age 62.

“You can withdraw your application for up to 12 months after your first month of entitlement; however, there are significant restrictions,” Farr noted.

You can only withdraw the application once, and you must repay any benefits received (including any benefits paid to family members and/or certain amounts withheld from the payment). “Therefore, once the window closes after twelve months, you cannot simply cancel out your original application,” Farr said.

Once you reach full retirement age (the age at which you are eligible for unreduced Social Security benefits), you can suspend your Social Security benefits so that delayed retirement credits accumulate throughout the rest of your life. “When you elect to resume drawing Social Security again, however, it cannot occur later than age 70,” Farr added.

The views and opinions expressed are those of the interviewees. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. NTD does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. NTD holds no liability for the accuracy or timeliness of the information provided.