Claiming Social Security retirement benefits at age 62 has its plusses and minuses.
On the plus side, you get access to supplemental retirement income as soon as possible. Most people become eligible for retirement benefits at 62, and many don't want to wait a second longer than they have to. On the minus side, you'll permanently reduce your monthly benefit check in exchange for the right to collect benefits earlier (resulting in more checks over your lifetime).
Understanding how much the Social Security Administration reduces your benefit by claiming early can shed some light on the average Social Security benefit for those collecting at age 62 and how it compares to the average retiree. And once you see the numbers, you might decide to delay your benefits just a few years longer.
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How the government calculates your Social Security benefits
Your monthly Social Security check is determined by just three main factors:
- Your earnings record
- Your full retirement age
- Your claiming age
When the Social Security Administration looks at your earnings record, it takes your 35 highest-earning years (adjusted for inflation) and averages them. If you didn't work at least 35 years, the SSA will fill in the missing years with $0 earned. Once it's established your average monthly earnings, it plugs that number into its Social Security benefits formula, and it determines your primary insurance amount, or PIA.
Your primary insurance amount is the amount you'll receive if you claim benefits at your full retirement age. For those born in 1954 or earlier, your full retirement age is 66. But the full retirement age increases by two months for every year after 1954 until reaching age 67 for those born in 1960 or later.
Claiming earlier or later than your full retirement age will result in a reduction or addition to your PIA. The SSA reduces your benefit by a certain amount each month if you claim early, and it'll add 2/3 of a percentage point to your PIA for each month you delay beyond your full retirement age. Here's what that looks like for someone with a full retirement age of 67.
| Claiming Age | % of PIA Received |
|---|---|
| 62 | 70% |
| 63 | 75% |
| 64 | 80% |
| 65 | 86.67% |
| 66 | 93.33% |
| 67 | 100% |
| 68 | 108% |
| 69 | 116% |
| 70 | 124% |
Data source: Social Security Administration. Calculations by author.
What's the average Social Security benefit at age 62?
As you can see in the table above, future retirees planning to take Social Security at age 62 will reduce their benefit by 30% relative to full retirement age. Despite the haircut, it remains the most popular age to claim retirement benefits. Roughly 27% of new retirement benefits applicants were 62 when they filed in 2022.
The 565,887 retired workers who were 62 years old and receiving Social Security benefits in December 2022 (the most recent data available) received an average of $1,275 that month. That's just $15,300 per year. By comparison, the average Social Security benefit for all retirees that month was $1,825.
There are some good reasons many people claim at age 62, though. The best reason for claiming early is if your health is in question. If you can reasonably expect to live a shorter life than your peers, it might make sense to claim early and ensure you get your Social Security benefits when you can use them.
Another reason someone might claim early is because they simply need the money. It's worth pointing out that the data from the SSA suggests the average person claiming Social Security at age 62 has a lower primary insurance amount than those who wait until full retirement age. In other words, they earned less during their careers either due to lower wages or a premature exit from the workforce. As a result, they might not have as much saved for retirement and they truly need Social Security to make ends meet. That's as good a reason as any to take Social Security as soon as possible.
It's in your interest to wait if you can afford it
If you don't fall into one of the above categories of retirees, it's in your best interest to wait as long as possible to claim your Social Security benefits.
Not only will you increase your monthly benefit by delaying, but you'll also increase the likelihood of maximizing your retirement savings by delaying as long as possible. A 2019 study from United Income backs that up. It found the majority of retirees would optimize their Social Security benefits by waiting to claim until age 70. In this case, optimize means "maximize their chance of having enough money in retirement."
On the other hand, the study found claiming early typically resulted in a loss of potential wealth and retirement income. Just 8% of retirees would optimize their Social Security benefits by claiming before their 65th birthday. So, while it does work out for some, the odds are you'll do better by delaying as long as you can afford to do so.
