Turning 62 in 2026? 3 Things You Need to Know

Turning 62 may not seem like such a big deal to you. And if you had a big celebration for your 60th birthday, you may be inclined to do something more low-key to mark your 62nd.

But 62 is actually a pretty significant age when it comes to retirement. Here are three things you need to know if you'll be reaching age 62 in the coming year.

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1. You can take penalty-free withdrawals from retirement savings -- but it could pay to wait

Once you turn 59 and 1/2, you're eligible to take penalty-free withdrawals from your IRA or 401(k). Prior to that, you risk a 10% early withdrawal penalty.

Clearly, at 62, you can tap your savings as much as you want. But you may want to hold off on taking an IRA or 401(k) plan withdrawal unless you really need the money. This especially holds true if you're still working.

Remember, whether you have your retirement savings in a traditional IRA or 401(k) or a Roth, the longer you keep that money in your account, the more tax-advantaged treatment it gets to enjoy. With a traditional retirement plan, your investment gains are tax deferred. With a Roth, there are no taxes on gains whatsoever.

Also, you don't know how long you'll live and what expenses might arise later in life. So if you're able to avoid tapping your retirement savings a few extra years, you might as well.

2. You can claim Social Security -- but there's a risk

Age 62 is the earliest age to start collecting Social Security. But if you sign up for benefits then, you'll reduce them on a permanent basis.

If you're turning 62 in 2026, it means your full retirement age for Social Security is 67. Filing for benefits at 62 will result in a 30% reduction, which could be a very big deal if you expect Social Security to be a significant source of retirement income for you.

Also, if you're still working, there are two reasons to hold off on Social Security. First, you may not need the money since you're still collecting a paycheck.

Second, if you're 62 and working while on Social Security, you'll be subject to the program's earnings test. If you earn more than $24,480 in 2026, you'll have $1 in Social Security withheld for every $2 of income.

Those withheld benefits won't be lost forever, since you'll start getting that money back once the Social Security Administration recalculates your monthly payments at full retirement age. But the reduction in benefits you lock in by filing early will be permanent. So if you don't need Social Security right away, it could very much pay to wait.

3. You're too young for Medicare -- so don't rush to retire

You might assume that because you can claim Social Security at 62, you can also sign up for Medicare at that point. But Medicare eligibility generally does not begin until age 65. So if you're thinking of retiring at 62, whether in conjunction with filing for Social Security or not, know that you'll need to figure out healthcare if you'll be giving up your employer's plan.

Now you might assume that you can just buy your own health insurance. And that's certainly a possibility. But the cost may be a lot more than you bargained for.

Also remember that even if you manage to find a relatively affordable plan, it may not give you the same level of coverage that Medicare or your employer's plan might. So if you have health issues, you may want to continue working until at least age 65 to retain good insurance.

That said, you may not necessarily have to work full-time to get that coverage. Your employer might keep you on their health plan if you're working at least 20 hours a week.

You'll have to talk to them and see what options you have. But don't underestimate the cost savings of having either an employer-subsidized health plan or Medicare access compared to buying your own insurance.

There's lots to be excited about if you're turning 62 in 2026. But make sure to keep these important financial points in mind as you celebrate that big occasion.

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