Thinking of Claiming Social Security at 62? 3 Things You Must Know.

Key Points

• The earliest age you can claim Social Security is 62.

• Filing at that point will reduce your monthly benefits, but there's more to the story.

• Think through your financial situation before moving forward with such an early filing.

• The $23,760 Social Security bonus most retirees completely overlook ›

There's a reason 62 tends to be a common age to sign up for Social Security -- it's the earliest age you're allowed to take benefits. If you're thinking of filing for Social Security at 62, it's important to understand exactly what that means for you and your family financially. Here are three key pieces of information to keep in mind.

1. You'll reduce your monthly benefits for life

You're entitled to your complete Social Security benefit without a reduction at full retirement age, which is 67 for anyone born in 1960 or later. You can start getting those benefits at 62, but the Social Security Administration will reduce them if you sign up before full retirement age.

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One thing you must know is that any reduction in Social Security you face by claiming early is a permanent one. And if you sign up at 62 with a full retirement age of 67, you're looking at slashing your monthly benefits by 30% for life. If you don't have a lot of retirement savings, that's a hit you may not be able to afford easily.

2. You'll leave your spouse with a smaller survivor benefit

If you're married, the financial decisions you make regarding your retirement can significantly impact your spouse. And that extends to Social Security.

If you're the higher earner in your household, your spouse might depend heavily on Social Security survivor benefits if they end up outliving you. But if you claim benefits at 62 and reduce them substantially in the process, it could mean leaving your spouse with that much less money once you're no longer around. That could cause them a world of stress and make it difficult for them to keep up with their expenses.

3. You'll be subject to an earnings test if you're still working

You don't have to stop working to claim Social Security. And once you reach full retirement age, you can earn any amount of money from a job without it negatively impacting your Social Security benefits if you're collecting them.

But if you claim Social Security before full retirement age, you'll be subject to an earnings test if you're still working. And exceeding its limit could result in withheld benefits.

In 2025, you can earn up to $23,400 without risking the withholding of your Social Security benefits. Beyond that point, you'll have $1 in Social Security withheld per $2 of earnings.

Now you should know that if you have benefits withheld for exceeding the earnings-test limit, they're not forfeited completely. You should get the money back in the form of larger monthly benefits once full retirement age arrives.

However, it may not make sense to reduce your benefits by claiming them at 62 only to then have most of that income source withheld due to earning too much. Run the numbers to see how much Social Security, if any, you're likely to lose temporarily.

Though it's easy to see why 62 is such an appealing age to file for Social Security, it may not be the optimal age for you. Or maybe it is. The key, either way, is to understand the ramifications of taking benefits that early and to make sure you're prepared to deal with the aftermath.

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