Personal Finance

1 in 3 Americans say they plan to file early for Social Security benefits and continue working - is this a good idea?

Ian Cooper

Published: October 22, 2024 1:46 pm

Experts say it’s better to wait to claim Social Security benefits.

But for many of us, the advantages of early collection outweigh the disadvantages. In fact, with millions of us facing different financial challenges, it really depends on personal needs.

Key Points About This Article:

•  Taking Social Security at age 62 can make sense for some, but it’ll reduce your payout.
• If you’re facing financial emergencies, you could benefit from accessing benefits early.
• It’s estimated that about a third of Americans want to claim Social Security early at the age of 62 while still maintaining employment.
• Also: Take this quiz to see if you’re on track to retire ^(Sponsored)

Right now, it’s estimated that about a third of Americans want to claim Social Security early at the age of 62 while still maintaining employment. While that’s certainly ok to do, consider this.

According to Kiplinger: “The money you earn from a job before reaching full retirement age can affect your Social Security benefits. In 2023, Social Security deducted $1 from benefits for each $2 earned over $22,320. If you turn full retirement age, Social Security deducts $1 from benefits for each $3 earned over $59,520 until you turn the full retirement age. Although you will get your money back after you reach full retirement age, you won’t have as much to spend in the meantime.”

However, sometimes health issues may force many of us to retire early. If that’s the case, you can apply for Social Security disability benefits. This, according to the Administration, is “the same as a full, unreduced retirement benefit. If you get Social Security disability benefits when you reach full retirement age, we convert those benefits to retirement benefits.”

Or, you can always delay retirement, which will increase your benefits. Every year you work adds another year of earnings to Social Security. They’ll add 8% to your benefit for each full year you delay receiving benefits.

If You Choose to Collect Social Security Early

If you really just want to claim it early at 62 while continuing to work, that’s up to you.

By doing so, you can claim your benefits, continue working and potentially earn additional income without penalty once you reach full retirement age. However, by collecting early, you will receive a permanently lower monthly payout than if you waited. According to the Social Security Administration, if you turn 62 this year, your benefit would be about 30% lower than it would be at full retirement.

There are Personal Advantages to Taking it Early

There are several reasons to start taking Social Security at 62.

For one, you may need the money now because of health issues, expenses, or a financial emergency, or you simply want to just stop working for good. “If your current everyday living expenses surpass your Social Security benefit amount, you may not have the luxury of waiting for a larger payout,” says Lindsey Crossmier, a financial writer with RetireGuide, as quoted by US News. “You may need that money now to live comfortably.” 

There’s no magic formula for it.  But if you do want to start collecting early, give it a good bit of thought and be sure to speak with a financial advisor about your financial needs.