After Decades on Wall Street, I Took My Social Security at 62. Here’s Why.

Taking Social Security at 62 can make sense now, given the uncertainty surrounding major items, longevity, and financial stability. While delaying benefits increases the monthly payout, many people prioritize accessing guaranteed income earlier to cover living expenses, pay down debt, or enjoy retirement while still in good health. For those who may not expect to live into their 80s or 90s, starting benefits at 62 can maximize lifetime income by ensuring they receive payments for more years, rather than banking on a longer lifespan. In today’s climate of rising healthcare costs and economic volatility, having a steady income earlier can provide peace of mind.

Having worked on Wall Street for over 20 years as an institutional stockbroker and in the financial industry since 1991, I believe it would be beneficial to share my insights, particularly with those approaching their 60s, a stage in life where financial decision-making is crucial. One thing is sure: for some, taking Social Security at 62 is the perfect way to recoup the money they have paid in years early. Meanwhile, for others, it could be the worst mistake they can make.

Here’s why I took the plunge at 62.

One top reason I claimed my benefits at 62 was the flexibility it gave me. Early Social Security benefits helped me supplement my part-time work writing for 24/7 Wall St., which I started in 2012 at the age of 56. During my years working on Wall Street, I had the good fortune of being there in the roaring 1990s (very similar to now), at Bear Stearns during the dot-com boom. I had some great peak earnings years between my early 30s and mid-50s.

When I started reviewing those peak earnings years and my overall status on the Social Security website, it was apparent that even taking benefits at 62, I would still be receiving over $2,300 per month. The only hitch was that I had to try to stay below the earned income limit, which is now $23,400. This is where you huddle up with a qualified CPA for tax advice.

Are your benefits affected if you go over the earned income limit?

They will deduct some of your benefits if you go over the limit. The good news is that for those looking to cash in at 62, the benefits that are withheld while you work are not gone forever. Once you reach your full retirement age, the SSA will recalculate your monthly benefit to give you credit for the months that your benefits were reduced. This will result in a higher monthly payment for the rest of your life.

One significant advantage, especially if you have a sizable 401(k) or self-directed IRA, is that it can help you preserve your savings for longer and reduce the risk of depleting your nest egg during market downturns. For those concerned about the solvency of the Social Security system, taking benefits earlier may also feel like a safer bet. It ensures they receive some of what they are entitled to, rather than risking future policy changes that could reduce payouts or raise eligibility ages, which are likely to occur.

You don’t have to be in the top 10% earners for this to make sense.

Grabbing your benefits at 62 allows investors and those retired or still working to make the most of their healthiest years. Retirement is not only about financial security but also about maintaining a high quality of life. Having access to additional income earlier can make it possible to travel, pursue hobbies, and spend time with family. At the same time, you are still young enough to enjoy it fully, instead of waiting for a larger check later. Starting your Social Security payments at 62 becomes not just a financial decision but also a lifestyle choice, prioritizing freedom and experiences over delayed gratification.

I did the math, and here’s why it’s really a no-brainer.

I will break out the actual math and show you how it worked for me:

• Taking early benefits at 62 meant there were five years or 60 months between the time I would start to receive my full benefits at 67.
• 60 months times $2,300 = $138,000.
• The highest benefit available is $5,108, and I would not have qualified for that amount. However, I would likely have qualified for about 85% of that amount, or approximately $4,340 per month.
• At 67, it would take me 32 months, or almost three years, to recoup the $138,000 I had received. But at that point, I am 70, and I had eight years in my 60s to enjoy life and our second home. Additionally, I continue to receive our Social Security benefits unencumbered by limits, except for the adjusted gross income limit. Plus, I could avoid taking distributions from my IRA.

You don’t have to be a millionaire for the early benefits to work for you!

These are the items that fell in place for me to grab the cash at 62:

• I had consistent and somewhat substantial passive income coming in every month and quarter, plus money from a trust.
• Passive income does not reduce Social Security benefits.
• I had steady work at two part-time jobs, and that did move my adjusted gross income into areas where some benefits were withheld. Those are now back in my monthly distributions.
• My wife and I were virtually debt-free, and I was able to go on Medicare at 65. She will be 65 in December, making her eligible for Medicare. That will significantly reduce our medical expense.

62 is not for you if your current situation has some of these scenarios:

• Financial planning indicates that you will need your entire Social Security benefit at age 67.
• Your spouse may not have Social Security coming or very low benefits at 62. My wife took hers at 62 and now receives about $1,140 per month. That is an excellent supplement to my $2,300. The two combined equal $41,280 per year. It is an amount we could live on if we absolutely had to, because we are debt-free.
• You don’t have any pension or retirement savings that you can tap as you age.
• You don’t expect any inheritance.
• You are keeping your full-salaried job and don’t plan to retire until 67 or later.

I’m not a financial planner, CPA, or income tax specialist.

The kind of information I have offered here is the kind I wish I had seen more of when I decided to take benefits at 62. Yet, the reality is that investors should consult with a qualified tax accountant and financial advisors to ensure that taking the early benefit is a good idea for them. They will know many more of the ins and outs, especially with new tax laws hitting the books via the “Big Beautiful Bill.” Like any major financial decision, consider getting a second opinion, and possibly even a third.

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