I Retired and Regret Taking Social Security at 62 – Here’s the Reason

The Permanent Benefit Cut That Shocked Me

Claiming Social Security at 62 instead of waiting until full retirement age results in a permanent monthly benefit reduction of up to 30 percent. That sounds abstract until you’re living it. I thought getting money sooner meant more money overall, but the math tells a different story when you’re watching smaller checks arrive month after month.

As of December 2024, retired workers at age 62 brought home an average check of around $1,207, while those who waited until age 67 received an average of $1,719. That’s over $500 less every single month for the exact same lifetime of work.

The Earnings Penalty I Didn’t See Coming

Here’s something they don’t emphasize enough when you’re making the decision. If you haven’t reached full retirement age, your benefits are reduced by one dollar for every two dollars you earn above the annual earnings limit, which is $23,400 in 2025. I figured I’d take benefits early and maybe pick up some part time work to supplement things. That plan backfired spectacularly.

Taking early retirement while continuing to earn creates a double penalty: retirement benefits are permanently reduced, and you lose a portion of those benefits every month until reaching full retirement age. Social Security doesn’t just trim a little from each check either. The agency withholds several entire monthly checks until the anticipated reduction is paid off.

The Medicare Gap That Cost Me Thousands

If you retire at age 62, you’ll have to foot the bill for health insurance entirely on your own unless your former employer subsidizes insurance for retirees, which could result in a significant reduction in spending power. I hadn’t budgeted for three full years of private health insurance premiums before Medicare kicked in at 65.

The monthly premiums were staggering. Between the reduced Social Security check and the health insurance costs, I was barely ahead of where I would have been if I’d just kept working. Waiting just three years beyond age 62 makes a big difference because you’ll be eligible for Medicare at 65.

The Inflation Adjustment Problem

Your annual cost of living adjustment is based on your benefit amount, so if you begin claiming at 62 with reduced benefits, your inflation adjusted benefits will also be lower, which can be especially problematic during high inflation. This one caught me completely off guard.

I figured COLA adjustments would eventually close the gap between my reduced benefit and what I would have gotten at full retirement age. Nope. Let’s be real, when inflation hit hard in recent years, my smaller base amount meant my increases were proportionally smaller too. The gap never closes. It just grows in dollar terms as the years pass.

My Calculation Mistakes About Life Expectancy

Research from United Income examining 20,000 retired worker claims found that 57 percent of claims would have been optimal at age 70, yet very few retired workers actually chose to collect their payout at that age. I was one of those people who claimed early thinking I’d beat the system.

The break even age where total dollars received at age 67 begins to exceed total dollars received at 62 is around age 78 to 79. I’m 68 now and in good health. Honestly, I’ll probably make it well past that break even point, which means I’ll spend potentially decades getting less money than I should have.

The Survivor Benefit Impact on My Spouse

Benefits for a spouse who outlives you are based on how much Social Security you were receiving or entitled to receive at the time of death. My wife is three years younger than me and likely to outlive me by several years based on family history.

Your decision to take benefits early could outlive you, as your spouse would be eligible to receive your monthly amount as a survivor benefit if it’s higher than their own amount. Because I locked in that 30 percent reduction, she’ll be stuck with a reduced survivor benefit for potentially decades after I’m gone. That guilt hits differently when you think about your partner struggling financially because of your impatience.

The Statistical Reality Nobody Mentions

Research published in 2022 found just over 10 percent of claimants wait until age 70, while data from 2025 showed the share of retirees claiming at age 62 has fluctuated, with some recent data suggesting more people may be claiming at 62, including high earners. Most of us claim early. That doesn’t make it the right choice.

Researchers found actual claims and optimal claims to be near perfect inverses: while 79 percent of retired worker claims examined occurred between ages 62 through 64, only 8 percent of optimal claims occurred at these three claiming ages combined. We’re doing the opposite of what the numbers say we should do. I know it sounds crazy, but I wish someone had shown me these statistics before I signed those papers.

The Recalculation That Never Really Helps

Some financial advisors mention that once you reach full retirement age, Social Security recalculates your benefit to credit back months withheld due to the earnings test, and your monthly benefit is permanently increased rather than sending a lump sum refund. That sounds reassuring until you realize what it actually means.

It can take up to 15 years to completely recoup lost benefits from the earnings penalty. Fifteen years. By that point, I’ll be in my early eighties. The opportunity cost of that money sitting with Social Security instead of in my pocket or investment accounts is substantial.

What the Full Retirement Age Increase Really Means

The full retirement age increased by two months to 66 years and 10 months for people born in 1959, with the higher age taking effect in 2025 as this cohort began qualifying for full benefits in November. For Americans born in 1960, full retirement age is 67, marking the latest benchmark in a phased increase from the traditional age of 65 to 67 first enacted in 1983.

For younger workers considering when to claim, that gap between 62 and full retirement age keeps widening. Early claimants receive a reduced monthly benefit of about 30 percent less than they would have at their now higher full retirement age of 67. The penalty for claiming early has effectively grown over time as full retirement age has crept upward.

The Reality Check I Wish I’d Had

The median retirement age in the United States is actually 62, and nearly six in ten retirees say they stepped back from the workforce earlier than planned, often due to employment issues like job loss or poor health. I told myself I was making a choice, but looking back, I was reacting to burnout and frustration at work rather than making a calculated financial decision.

For every month from full retirement age until age 70 that you postpone filing, Social Security increases your eventual benefit by two thirds of one percent, totaling 8 percent for each year you wait, meaning someone reaching full retirement age at 67 who delays until 70 gets an extra 24 percent added to their monthly payment. That’s the opportunity I walked away from. Every single month I could have waited would have meant a bigger check for life. Instead, I jumped at 62 because the money was available and I was tired.

The worst part? I can’t undo it. This decision is permanent. There’s no reset button, no do over, no chance to reclaim those lost dollars. If I could go back and talk to my 62 year old self, I’d shake him by the shoulders and tell him to wait. Work part time if you hate your job. Tap retirement savings if you need cash flow. Just don’t lock in that 30 percent reduction for life.

What would you have done in my situation? Would the promise of immediate money have been too tempting to resist?