5 really bad consequences of filing for Social Security at 62 — are you making the wrong move?

If you choose to begin receiving Social Security benefits at the age of 62, you could face several negative outcomes. One key factor is that your monthly benefit will be permanently reduced as a result of taking early retirement. For those who reach full retirement age (FRA), which is currently 67, claiming benefits early can lead to a monthly reduction of up to 30%. So, if you're entitled to a $1,000 monthly benefit at FRA, claiming at 62 would only yield $700 per month.

Moreover, taking reduced benefits has its financial implications. This reduction could potentially trigger a period of financial strain, requiring you to tighten your budget. To assist in this situation, you might consider joining a senior-focused organization like AARP, which offers resources and discounts to help older Americans manage their finances more effectively. AARP members can access guides for navigating Social Security, Medicare, and other government benefits, potentially saving thousands of dollars.

If you choose to work while receiving Social Security benefits at 62, the Social Security Administration (SSA) may deduct some of your benefits for income earned above certain thresholds. For income above $24,480 in 2026, $1 will be withheld for every $2 earned. However, this deduction falls to $1 for every $3 earned until the year you reach your FRA. Once you reach your FRA, the SSA stops clawing back benefits, regardless of income earned.

Another downside of claiming early is the inability to apply for Medicare until you're 65. For those with workplace health benefits, there's no guarantee they'll extend coverage into retirement. If your employer isn't one of the 27% that offer health benefits beyond retirement age, you'll need to budget for medical expenses. At 62, the average monthly premium for medium-tier health insurance is $1,691, which could amount to over $20,000 annually before adding in out-of-pocket costs.

Waiting until age 67 to retire would increase your Social Security benefits by about 43% compared to claiming at 62.