Claiming Social Security Early? 3 "Gotchas" to Look Out For

There's a key retirement decision seniors grapple with all the time -- when to sign up for Social Security benefits. The earliest age you can file for Social Security is 62. But if you want your monthly checks without a reduction, you'll need to wait for full retirement age, which is 67 if you were born in 1960 or any year after.

Of course, it's tempting to claim benefits at 62 and get that money as soon as possible. But in doing so, you'll reduce your monthly checks by about 30% compared to waiting for full retirement age.

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That's a consequence you may be well aware of. But here are a few other pitfalls of claiming Social Security at 62 that may not be on your radar.

1. You'll be subject to an earnings test if you continue to work

You're allowed to work while collecting Social Security. And once you reach full retirement age, there's no earnings test to worry about.

Prior to full retirement, you'll be subject to Social Security's earnings test. And while the limits can change from one year to the next, the basic rule is the same -- earn too much, and benefits get withheld.

The earnings-test limit for 2026 is $24,480 if you won't reach full retirement age this year. In that case, exceeding that limit means having $1 in Social Security withheld per $2 of earnings.

The earnings-test limit is significantly higher if you will reach full retirement age this year -- $65,160. And earnings beyond that point mean having $1 in Social Security held back per $3 of earned wages.

Withheld benefits under the earnings test are not lost forever. Your benefits are recalculated once full retirement age arrives, and you'll have that money returned in the form of larger checks.

But on a near-term basis, your Social Security checks could shrink if you earn too much. You'll need to figure out if it's worth an early claim if you intend to keep working and will potentially lose some of your Social Security in the near term.

2. Your annual COLAs will be worth less

Social Security benefits are eligible for an annual cost-of-living adjustment, or COLA. Those COLAs are designed to help benefits keep up with inflation.

Once a COLA is established, it applies to benefits universally. For example, this year, benefits got a 2.8% COLA, so all Social Security recipients were eligible for that boost, regardless of how much they collect each month.

But the smaller your Social Security benefit is to begin with, the less valuable your COLAs will be on a dollar-for-dollar basis. That could make it harder to keep up with rising costs.

3. You risk leaving your spouse with a smaller survivor benefit

If you're married, the Social Security filing decisions you make could have an impact on your spouse in the context of survivor benefits. If you're the higher earner in your household and your spouse outlives you, they'll be entitled to a survivor benefit check that's the equivalent of the benefit you received while alive.

If you file for Social Security at 62 and reduce your own monthly benefit, you'll also be reducing your spouse's survivor benefit. That could leave them struggling to cover their costs, depending on what your total income picture looks like.

A reduced monthly benefit is only the tip of the iceberg when it comes to claiming Social Security at 62. As you can see, there are other consequences to be mindful of. And while that doesn't mean filing at 62 is the wrong choice off the bat, it does mean you need to look at the big picture when making your decision.

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