Retirement income is something that every person who works likely plans for from day one of their employment. With the Social Security program, 12.4% of your wages are paid into Social Security payroll taxes with 6.2% coming from the employee and 6.2% covered by the employer. As such, the amount you will be able to claim during your retirement is dependent on how much you had earned during your working years.
Your income earned during your working years is not the only factor that determines how much you will receive in benefits once you begin claiming from the Social Security program, however. The age at which you decide to begin claiming will also play an important role in exactly how much you are able to claim in benefits on a monthly basis. Here is what you need to know about claiming Social Security benefits from 62 years of age.
What is the best age to claim Social Security benefits?
For retirees, Social Security benefits can be claimed starting from age 62, however, the program also has a Full Retirement Age in place. Due to this Full Retirement Age, claiming as early as age 62 will likely result in a reduced benefit amount. Furthermore, if claiming at age 62, the beneficiary will had to have been 62 years of age for at least a month before being considered eligible to claim.
As such, since the Social Security Administration (SSA) pays out Social Security benefits a month after they are due, a retiree cannot begin claiming benefits during the month in which they had turned 62. The only exception to this would be if the retiree’s birthday fell on the first of the month. Additionally, once you begin claiming, the date on which you receive your benefits each month will be determined in relation to your date of birth as well.
For instance, for the current month of August, benefit payments will roll out as follows:
- Second Wednesday, August 13th – recipients with birth dates from the 1st of the month to the 10th
- Third Wednesday, August 20th – recipients with birth dates from the 11th of the month to the 20th
- Fourth Wednesday, August 27th – recipients with birth dates from the 21st of the month to the 31st
Reduced benefits for claiming early
As mentioned above, the SSA uses a Full Retirement Age, or FRA, as a point of reference when determining benefit amounts. The FRA has gradually been increasing for several decades now to accommodate for a higher life expectancy and as such, the FRA increased to 66 years and 10 months for those born in 1959. In 2026, the FRA will increase one final time as per the amendments to 67 years for those born in 1960 and later.
Consequently, claiming benefits from 62 is considered as “claiming early” and as a result, your could lose up to 30% of your benefit amount. The actual figure by which the benefit is reduced will differ from person to person in relation to the age at which they claim and their FRA.
“A benefit is reduced 5/9 of one percent for each month before normal retirement age, up to 36 months. If the number of months exceeds 36, then the benefit is further reduced 5/12 of one percent per month,” the SSA explains. Conversely, holding off claiming beyond the FRA until age 70 will result in a higher benefit than what you would receive at you FRA.
Furthermore, it is also worth noting that whilst claiming early will have no impact on spousal benefits for married retirees, their survivor benefit will be negatively affected. If you claim early, the survivor benefits that your dependents can claim upon death will be shrunken permanently.
Anyone claiming early will also possibly be subject to the retirement earnings test, particularly if they are earning above a certain threshold. The SSA explains the test as follows: “The RET reduces Social Security benefits before you reach FRA, and then increases benefits for the remainder of your life when you reach FRA. Benefits withheld while you continue to work are not lost; they are added to your monthly benefit once you reach FRA.”