Social Security Benefits at 62: What Experts Want You to Know First

Facing the Social Security Decision at 62

You’re not alone if you’re feeling overwhelmed by the Social Security claiming decision at 62. The weight of choosing when to start benefits can feel enormous, especially when headlines about the program’s future seem to change daily. Many people in your situation are grappling with the same concerns, and it’s completely natural to feel anxious about making the right choice.

Here’s the thing: understanding how Social Security works becomes crucial when you’re facing this life-changing decision. The uncertainty has intensified recently with troubling developments from the Social Security Administration. In February, the agency announced plans to reduce its workforce by 7,000 positions, bringing staffing to a 50-year low. This means longer wait times for answers to your questions and slower processing of claims. You deserve better service during such an important life decision.

The June 2024 Trustees Report delivered even more concerning news. The trust fund supporting retirement and survivor benefits is now projected to be depleted by 2033, one year sooner than previously estimated. Without congressional action, Social Security benefits could face a 23% reduction starting in 2025. These aren’t the retirement conditions you planned for when you started working.

Legislative Changes Fall Short of Expectations

Recent legislative efforts have provided limited relief for those approaching retirement. While President Trump initially proposed eliminating taxes on Social Security benefits in the One Big Beautiful Bill, this provision didn’t survive in the final legislation signed on July 4th.

The enacted version does include an additional tax deduction for those over 65 who meet specific income requirements. However, this benefit only applies from 2025 through 2028. If you’re 62 today, you won’t qualify until 2028 when you turn 65, and there’s no certainty the deduction will continue beyond that timeframe.

Patrick Huey, a certified financial planner with Victory Independent Planning in Naples, Florida, regularly counsels clients facing this dilemma. “It’s routine for clients to ask whether they should take benefits at 62 out of concern that Social Security’s finances are uncertain and future reductions might be implemented,” he explains. “My response is clear: Unless a well-developed financial plan demonstrates otherwise, taking benefits early simply out of fear is rarely advisable.”

The Financial Reality of Waiting

The mathematics of Social Security timing can work against you if you claim early out of fear. Claiming at 62 means accepting a permanent 30% reduction compared to waiting until your full retirement age of 67. This reduction stays with you for life, and you can never recover that lost income.

Here’s what makes this particularly challenging: if the trust fund becomes depleted, those benefit cuts could affect both current and future recipients unless Congress creates exceptions. “So, if you take a reduced benefit early, you risk locking in both the early-claiming penalty and the across-the-board reduction,” Huey cautions.

Most financial advisors recommend waiting until at least your full retirement age of 67, or ideally until 70 to maximize your benefits. For each year you delay claiming beyond full retirement age until 70, your annual benefit increases by 8%. This represents a guaranteed return that even the strongest investment portfolios can’t promise.

Social Security also includes cost-of-living adjustments, which means future increases will be calculated on your higher benefit amount. This creates more monthly income and larger dollar increases over time. If you’re married, delaying can also increase the survivor benefit for your spouse, providing additional financial security for your family.

Consider the earnings test if you’re still working. Claiming before full retirement age while earning above certain limits means Social Security will temporarily reduce your benefits. They’ll readjust your benefit upward once you reach full retirement age to account for what was withheld, but it creates unnecessary complications.

When Early Claiming Makes Sense

Sometimes your personal circumstances make claiming at 62 the right choice. If you’re dealing with serious health issues that have shortened your life expectancy, claiming early becomes a practical decision. There’s no benefit in waiting for money you might not live to enjoy.

Financial necessity represents another valid reason. If your savings are insufficient and you need Social Security checks to cover basic expenses, claiming early might be your only realistic option. Meeting your immediate needs takes priority over optimization strategies.

Maggie Beach, a CFP and certified public accountant with NexJenn Financial Services in Naperville, Illinois, takes a comprehensive approach to this decision. “When we talk about optimizing Social Security, I don’t like to say, ‘Let’s get the most that we can out of Social Security,'” she explains. “I’m like, ‘Let’s use that to your best advantage to really optimize the overall plan.'”

Beach has worked with married couples facing substantial tax bills from required minimum distributions (RMDs) that begin at age 73. These mandatory withdrawals from traditional IRAs can push couples into higher tax brackets. To avoid this, some couples gradually convert their accounts to Roth IRAs, which have no RMDs and offer tax-free future withdrawals.

Strategic early claiming can play a role here: Beach’s analysis showed it was more advantageous for the spouse with the lower Social Security benefit to file before full retirement age and use that money to pay the conversion tax bill. This allowed the other spouse’s larger Social Security benefit to continue growing until age 70. “The claiming decision really does become more about how does it come into play about maximizing their overall retirement income and minimizing lifetime taxes,” Beach notes.

Understanding the Financial Impact

The potential cuts represent substantial money. The average retiree received $2,002.39 in May, and a 23% cut would mean losing almost $460.55 per month, or $5,526.60 per year. This represents real money that could significantly impact your quality of life in retirement.

PensionBee conducted an analysis estimating the total cost of Social Security’s 2033 shortfall at $138,000. This calculation assumes you retire at full retirement age (67), withdraw 4% per year, and your portfolio returns 5% annually. This represents a substantial gap that could affect many retirement plans.

Even with these concerning numbers, claiming early at 62 still doesn’t make mathematical sense just to avoid the potential shortfall. Remember, you’d be accepting a 30% decrease by claiming early, which is actually larger than the projected 23% cut. You might end up with both penalties if Congress doesn’t take action.

Options for Those Who Claimed Early

If you’ve already claimed early and are having second thoughts, you might have options. Social Security allows you to stop and restart benefits in certain situations. If you claimed at 62 and later regret it, you have up to 12 months from when your benefits were approved to withdraw your application. The requirement is that you must repay any benefits you’ve received.

After that withdrawal, it’s as if you never applied, and your benefit will continue growing. It’s essentially a financial do-over, though not everyone will have the cash flow to repay what they’ve already received.

Growing Applications Reflect Widespread Concerns

The uncertainty is clearly affecting people’s decisions. Applications for retirement benefits surged early in 2025 and are up by about 16% for the first six months compared to the same period in 2024, according to the Social Security Administration. Applications have since returned to normal levels, but the initial increase was significant.

Michael Stevens, deputy chief actuary with the Social Security Administration, addressed this trend during a recent webinar sponsored by the American Academy of Actuaries. Some of the increase stems from a new law allowing certain public sector employees and their spouses to receive retroactive and increased benefits.

“Another factor that may be playing in here is some unease with the economy and some unease with potential changes coming to Social Security. People may be trying to get an application in to get on the rolls,” Stevens explained. “They are also thinking of insolvency as well.”

This isn’t Social Security’s first challenge with insolvency. In 1983, lawmakers stepped up to reform the program just months before benefits were scheduled to be cut. Many experts expect history to repeat itself, with politicians seeking re-election developing solutions to avoid slashing benefits for tens of millions of voters.

The decision of when to take Social Security remains deeply personal, influenced by your health, financial situation, and family circumstances. While the program’s financial challenges are real and concerning, making decisions based purely on fear rarely leads to optimal outcomes. Most financial advisors recommend taking a comprehensive approach that considers your entire retirement planning picture, not just Social Security’s uncertain future.