Personal Finance

Social Security: 3 Things You Must Do Before Claiming Benefits at 62

Maurie Backman

Published: February 19, 2025 12:07 pm

Age 62 tends to be a popular time to claim Social Security because it’s the soonest seniors are allowed to get their benefits. Many people unfortunately end up out of work by age 62. So for them, claiming Social Security might be the only choice.

But what if you’re in a different boat? What if you’re still working at 62, but are thinking of signing up for Social Security and bringing your career to a close?

It’s important to put a lot of thought into your claiming decision. So to that end, make sure to tackle these key tasks before filing for Social Security at 62.

1. Get an estimate of your monthly benefit

No matter what Social Security filing age you may be looking at, it’s important to have an idea of what monthly benefit the program will give you. Your age will play a role in that number, but so will your earnings history. So it’s a good idea to create an account on the Social Security Administration’s website and access your most recent earnings statement.

Your earnings statement will show you an estimate of your monthly Social Security benefit based on different filing ages. You’ll be able to see what that number looks like if you wait until full retirement age (FRA) to sign up.

2. Calculate the hit you’ll take

Claiming Social Security before reaching FRA reduces your monthly benefit on a permanent basis. So once you get an estimate of your monthly benefit at FRA, run the numbers to see what signing up at 62 will mean for you.

Your earnings statement should show you what hit you’ll take with an early filing. But as a general rule, the formula goes something like this: Your benefits will decrease by about 6.67% per year for the first three years you file early, and then by 5% a year for each year after that.

That may sound complicated, but let’s break it down. Filing for benefits three years early generally means about a 20% reduction. Filing four years early means a 25% reduction. And filing five years early means a 30% reduction.

So as a basic example, if you’re entitled to a $2,000 monthly benefit at an FRA of 67, signing up for Social Security at 62 would leave you with just $1,400 a month instead.

3. See how well your savings stand up

If you’re old enough to be thinking about claiming Social Security, then you hopefully have an idea of what your retirement expenses will amount to. That should enable you to set a monthly budget — either on your own or with the help of a financial advisor.

Before you decide to file for Social Security at 62, you’ll need to see what monthly income your savings can provide you with. Then, you can run the numbers to see if you can afford a hit to your Social Security benefits.

Say you have a $600,000 nest egg and want to withdraw from your savings at a rate of 4% a year. That gives you $24,000 a year in income, or $2,000 a month.

Meanwhile, let’s say you expect your monthly expenses to come to $3,000 in retirement. If claiming Social Security at 62 gives you at least $1,000 a month in benefits, then it’s something you can afford to do.

Of course, whether you should do it is another story. You may end up forgoing a lot of income in the course of your lifetime by taking benefits at 62. So it’s a good idea to consult a financial advisor when you’re making a decision that’s this important.