10 Consequences of Claiming Social Security at 62

Social Security retirement benefits can be claimed starting at 62. But starting your benefits the minute you become eligible for them can have consequences for the remainder of your life.

And, depending on your circumstances, you may end up regretting your claiming choice.

So before you file for your Social Security checks, make sure you understand these 10 consequences of beginning your benefits at 62.

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Everyone has a "full retirement age," or FRA, you must reach to claim your standard benefit. Depending on your birth year, it's between 66 and 2 months and 67.

For any month you claim benefits ahead of FRA, an early filing penalty applies. Since 62 is the earliest you can claim your benefits, you would be hit with the maximum number of early filing penalties.

Since claiming benefits at 62 is considered early, the penalties that apply for starting your checks before full retirement age can be substantial. In fact, if you claim at 62 when your full retirement age is 67, you will end up with a check that's 30% smaller than your standard benefit would've been if you'd waited.

Many people incorrectly believe that when they hit their full retirement age, their benefit amount will be recalculated upward and they'll get their standard check. That's not the case. The hit your income takes due to early filing is a permanent one.

Cost-of-living adjustments (COLAs) are periodic Social Security raises that help ensure benefits don't lose buying power due to rising prices.

Each COLA is calculated as a percentage of the current benefit you're receiving. If you've made your starting benefit smaller due to early filing penalties, that means you'll also see fewer extra dollars in your check when a COLA occurs.

ALSO READ: Cost-of-Living Adjustments Don't Pack the Same Punch if You Claim Social Security Early

Although you can earn eligibility for Social Security retirement benefits after a 10-year work history, the amount of your check is always going to be based on the average wages you earned during your 35 highest-earning years.

If you don't have a 35-year career history, the formula is still the same. Since that means years of $0 wages would be part of your average, you'd see smaller benefits.

If you retire and claim Social Security at 62, there's a greater chance that you won't have your 35 years in and will take this additional hit to your monthly checks.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

If you are earning more now than you did at any earlier points in your career (on an inflation-adjusted basis), then retiring to start your Social Security checks could mean giving up the chance to grow your benefits.

See, if you worked longer than 35 years, you could replace some lower-earning years with some higher-earning years, leaving yourself with a bigger average wage used to determine your benefits.

Of course, it's possible to claim Social Security at 62 and keep working, thus continuing to earn wages that count toward your benefit amount. But there's a big caveat.

When you claim benefits prior to full retirement age, you can only earn a minimal amount of money before you end up forfeiting some of your Social Security checks.

In other words, if you were hoping to keep working at a high-paying job, it probably wouldn't make sense to start Social Security at 62 since you'd end up losing most or all of your benefits anyway.

Eventually, you get back the forfeited money because your payment amount is recalculated at full retirement age to account for it. But breaking even for missed benefits takes a long time. There's little reason to claim your Social Security checks only to end up losing most of them anyway due to your paychecks.

If you were the higher-earning spouse, you could create financial hardship for your surviving partner if you claim Social Security early and pass away first.

See, when you start benefits at 62, you don't just shrink your own benefit -- you reduce survivors benefits as well. That could be a big problem if your widow or widower is reliant on this money as an important income source after you're gone.

ALSO READ: Social Security Survivors Benefits -- What You Need to Know

When you claim Social Security at 62, you will shrink your monthly check. But you will also get more total checks over your life than people who claim later. As a result, starting benefits early doesn't always mean less income over your lifetime.

However, for close to 6 in 10 retirees, claiming Social Security at 70 is the strategic move that will provide the most total benefits over time.

That may not be the case for you, depending on your health status. But the odds are that by starting checks early, you'll be accepting less money in the long term.

The $17,166 Social Security bonus most retirees completely overlook
If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. For example: one easy trick could pay you as much as $17,166 more... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Simply click here to discover how to learn more about these strategies.

If you claim Social Security at 62 and regret it, there's often not a lot you can do to fix the situation.

If you claimed benefits less than 12 months ago, you could rescind your application for benefits. Then you'd be treated as if you hadn't claimed them at all. But you would have to repay any benefits received.

If this isn't an option, you'll likely be stuck with the reduction in benefits for the rest of your life.

For many people, late retirement is a time of significant healthcare expenses -- and it's common for savings to start to run short.

If you don't have as much money left in your retirement accounts and you still have pressing expenses, you may really regret the fact you shrunk your Social Security checks.

ALSO READ: What Will Healthcare Cost You in Retirement? Prepare to Be Shocked

Although there are clearly some serious consequences to claiming Social Security at 62, that doesn't mean no one should ever start their benefits at this age.

In fact, there are plenty of good reasons it may make sense to begin getting checks early, including preserving your savings.

But the important thing is to make sure you understand the downsides along with the upsides, so you can make a fully informed choice that makes sense given your finances and goals.

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