You claim Social Security at 62 because you want the most checks possible. It might be the last piece of the financial puzzle that enables you to retire. Or it could supplement your salary so you can raise your standard of living — at least, that’s how it’s supposed to work in theory.
In practice, claiming Social Security at 62 can backfire on some beneficiaries in ways they hadn’t expected. Here’s how it could actually short-change you and what you can do to hold onto more of your benefits.
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Claiming Social Security early could cost you in multiple ways
There are three ways that claiming Social Security at 62 could actually reduce how much of your benefits you get to keep. Some people are affected by one, while others are hit by all of them.
The first is the early claiming benefit reduction. The Social Security Administration considers applying at 62 to be early claiming, and it automatically reduces your checks by up to 30% up front.
Beneficiaries who work may also encounter the Social Security earnings test. This is a little-known rule that withholds benefits from beneficiaries who earn more than a certain amount from their jobs while under full retirement age (FRA). This is 67 for most people today.
Specifically, you lose $1 for every $2 you earn over $24,480 if you’ll be under your FRA for all of 2026. If you’ll reach your FRA this year, you lose $1 for every $3 you earn over $65,160, but only if you earn this much before your birth month.
You only forfeit these funds temporarily. When you reach your FRA, the Social Security Administration increases your benefits to make up for what it withheld before. But in the short term, you could lose some or all of your checks to the earnings test, leaving you with less monthly income than you expected.
You could also be in danger of losing money to Social Security benefit taxes, especially if you’re still employed. This depends on your provisional income, which is your adjusted gross income (AGI) plus nontaxable interest and half your annual Social Security benefits. A job could raise your AGI and increase your risk of owing these taxes on your checks.
When you may not want to claim Social Security at age 62
Because of the reasons mentioned above, you may not want to claim Social Security at 62 if you’re still working or if you don’t need the money right now. Waiting to apply will increase your monthly benefits, and once you pass your FRA, you won’t have to worry about the earnings test anymore.
If you decide to claim Social Security at 62 anyway, make sure you’re prepared for the earnings test and possible benefit taxes. You may need to rely more heavily on other retirement income sources, and it’s a good idea to consult with an accountant to learn how Social Security benefit taxes could affect your overall tax liability.
