Should I Take Social Security at 62 or Wait [Do the Math]

Are you basing your retirement plan on advice from the media, thinking you’ll work forever to build the ultimate nest egg? Are you delaying Social Security until age 70 for that bigger monthly payout? Here’s a thought: Waiting until 70 might not be your best move. In this article, I’ll break down why claiming Social Security at 62 could actually be a smarter decision—and why holding off might cost you in the long run.

What’s better? Social Security at 62, or wait?

When I casually mentioned to my friends at a get-together that my husband and I were planning to claim Social Security early, the looks I got were priceless. It was like we’d committed some kind of financial blunder. They immediately jumped in, telling me we’d be making a huge mistake because waiting would guarantee us larger monthly checks.

And yes, they weren’t wrong—if we waited until full retirement age (for us, 66), our checks would be about 25% higher. The Social Security Administration even has a page explaining the reduction in benefits when you claim early.

But here’s the thing: My friends were stuck in a narrow mindset, focusing only on the size of the monthly check. Rebel Retiree and I? We were looking at the bigger picture.

If we waited those extra four years, we’d be missing out on tens of thousands of dollars in the meantime. We planned to use that money now to invest in ourselves and not leave it on the table!

Crunch the numbers: Delaying Social Security might cost you.

In 2019, the average Social Security check at full retirement (age 66, but that may be different for you depending on your year of birth) is approximately $1,500 per month.

Let’s break it down. If you claim Social Security at 62, you’d receive roughly 70% of the full retirement benefit. So, using the average of $1,500, that would be about $1,050 per month.

Over a year, that adds up to $12,600. Now, multiply that by four years, and you’re looking at $50,400 in benefits *before* you even hit full retirement age at 66.

If you wait to claim later, that’s $50,400 you’re essentially leaving on the table—money you could be using when it might matter the most. Think about the opportunities: investing, covering unexpected unemployment, managing a disability, or dealing with illness. These are all real-life scenarios where having that extra income at 62 could make a huge difference.

But let’s be fair and consider the other side of the argument.

Yes, claiming early means a reduction in your monthly check—around 30%, according to Social Security. So, if you were expecting $1,500 at full retirement age, filing at 62 knocks that down by $450 a month. That’s $5,400 per year you’d be giving up by collecting early.

That sounds like a lot, right? But here’s the kicker: by waiting, you’re also missing out on 48 monthly payments. Add to that the fact that you’ll likely keep contributing to Social Security for four more years! By the time you “break-even” for waiting, you’ll probably be well into your 70s, or even your 80s.

5 reasons why it is better to take Social Security at 62.

1. Spousal benefits.

Aside from our self-employment, I’ve spent my years as a homemaker, raising our children. At the advice of my accountant, I made sure to take a salary and pay Social Security taxes during that time.

Unfortunately, when it came time to collect benefits, I didn’t have enough credits in my account to qualify on my own. But here’s the good news: I was still able to claim spousal benefits based on Rebel Retiree’s earnings.

Read: “I’m a Homemaker, Can I Collect Social Security Benefits if I’ve Never Worked?”

Now, I receive a monthly check that amounts to 50% of what my husband receives. Let’s break that down using the average benefit amount of $1,500, with a 30% reduction for filing at 62.

At 62, instead of $1,500, the benefit would be reduced to $1,050. Then, add spousal benefits—half of the higher earner’s amount, or $525—and you’re looking at a total of $1,575 per month. Over four years, that adds up to $75,600.

If I had waited to claim, that’s $75,600 I’d be giving up—money that could be used now, rather than later.

While not every spouse’s age is within a year or two of the other, it’s prudent to take a look at your particular situation and determine where you will receive the most benefit.

2. Keep earning when you collect Social Security benefits at 62.

You can absolutely collect Social Security and still bring home a paycheck.

Here’s the deal, according to the Social Security Administration: If you’re working for someone else, only your wages count toward the earnings limits. But if you’re self-employed, they only factor in your net earnings from self-employment.

And here’s the best part—there are plenty of income sources that don’t count against those limits. Things like government benefits, investment earnings, interest, pensions, annuities, and capital gains are completely off the table. So, you can keep earning from those sources without worrying about affecting your Social Security check!

There are rules, Social Security says it works like this.

“Let’s say that you file for Social Security benefits at age 62 in January 2019 and your payment will be $600 per month($7,200 for the year). During 2019, you plan to work and earn $22,600 ($4,960 above the $17,640 limit). We would withhold $2,480 of your Social Security benefits ($1 for every $2 you earn over the limit). To do this, we would withhold all benefit payments from January 2019 through May 2019. Beginning in June 2019, you would receive your $600 benefit and this amount would be paid to you each month for the remainder of the year. In 2020, we would pay you the additional $520 we withheld in May 2019.”

Read: Don’t Worry if You’ve Exceeded the Social Security Earnings Limit

According to Social Security’s formula, if you make over the earnings limit, they will withhold $1 for every $2 that you go over the limit.

The good news is that when you turn 66, you can reclaim that money. Social Security will recalculate your monthly amount, and give you credit for payment that was withheld when you went over your earnings limit.

While it won’t come as a lump sum, your monthly Social Security check will get a nice boost if you continue to work. Plus, once you hit full retirement age, the sky’s the limit—you can earn as much as you want without any annual earnings limits holding you back.

That’s right! You can continue working, earning as much income as you like, while still collecting your full Social Security benefits each month. No limits, no penalties, just more money in your pocket!

This PDF from the SSA is a complete guide to how work affects your benefits.

3. Take the money and invest in yourself.

In a previous article, I mentioned that baby boomers aren’t content to just sit back and watch life pass them by. I was speaking from my own experience with my generation, but it turns out that statement couldn’t be more true.

Boomers aren’t settling for a quiet, sedentary retirement. Many are embracing the entrepreneurial spirit, and the numbers are growing. In fact, the average age of a business owner in the U.S. is now over 50. According to a Kaufman report, in 2016, individuals aged 55 to 64 made up a whopping 25.5% of all new startups.

So why not take early Social Security, work part-time, and use your extra time to start a business or generate passive income? Invest in yourself while collecting those benefits. These strategies can lead to a retirement that not only lasts but thrives well into your later years.

4. Life expectancy. How long do you plan to live?

Seems like a no-brainer, right? We all want to live as long as we can, and the cool part is, the longer we live, the longer our life expectancy stretches out.

As a boomer who believes that age is just a mindset, I plan to live well into my golden years. But here’s the thing—many people believe that the decade between 60 and 70 is their last, best shot at truly living life to the fullest.

It’s when they still feel strong, energized, and full of life. It’s the perfect time to chase those dreams that have been waiting on the back burner—whether it’s traveling the world, spending time with grandkids, picking up new hobbies, or learning something completely new.

Now, I get that some people have to keep working until they can qualify for Medicare. But grinding full-time just to get a slightly higher Social Security check? That only makes sense if you absolutely love your job—or if you’re planning on living forever!

5. What do you value most? Freedom or money?

What do you value more—the freedom to live life on your own terms right now, or waiting around for a bigger Social Security check down the road?

Maybe I’m too much of an idealist, but I firmly believe in living in the now. Why delay those dreams you’ve been holding onto for your retirement? Don’t let the best years of your life slip by just because you’re banking on the Social Security Administration tossing you a bigger monthly check for waiting.

While I genuinely wish you a long, vibrant life, let’s face it—waiting might mean missing out. You could find yourself with nothing but regret for putting off the life you’ve always dreamed of.

Conclusion

It’s your choice.

Each individual’s circumstance is different, and you are the only one who can best determine when to retire and take Social Security. The purpose of writing this article is to encourage you to decide what you value most. Is it working longer to get a larger monthly check? Or could you file early for Social Security benefits and put that money to good use now?

Related Articles You May Like:

• Why Do So Many People Claim Social Security at 62
• I’m a Homemaker – Can I Collect Social Security Benefits if I’ve Never Worked?
• Don’t Worry if You Exceed the Social Security Earnings Limit

Photo (couple) by rawpixel.com from Pexels
Sources: Social Security Administration
Last update: 09/1009/24

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