Social Security Benefits at 62: Understanding the Pay Cut and Calculating Your Check Size

Retiring at 62 can result in significant pay cuts for Social Security benefits. Based on Bankrate's Social Security calculator, a 62-year-old retiree with an annual pre-retirement salary of $30,000 could receive $787 monthly, compared to $9,444 yearly. Early filing results in a 30% reduction in benefits, equivalent to $346 to $966 less per month, depending on salary.

Retiring at 62 can significantly impact your Social Security benefits. According to Bankrate's Social Security calculator, a 62-year-old retiree with an annual pre-retirement salary of $30,000 could receive $787 monthly, compared to $9,444 yearly. Early filing results in a 30% reduction in benefits, equivalent to $346 to $966 less per month, depending on salary [1].

The Social Security Administration (SSA) reduces benefits by 5/9ths to 5/12ths of one percent for each month you file for benefits before reaching full retirement age. This reduction can be substantial over time. For instance, a retiree who files at 62 instead of 67 will receive 30% less in monthly benefits, which translates to $346 to $966 less per month for the five salary scenarios calculated by Bankrate [1].

Waiting a few more years to file can make a significant difference. Waiting until age 64 will result in receiving 80% of the retirement benefits, while waiting until 65 or 66 will increase the benefits to 86% and 93%, respectively. After age 67, retirees start earning delayed retirement credits, which increase the benefit by 8% annually up to age 70 [1].

For a retiree with a pre-retirement salary of $75,000, waiting until 70 instead of 62 would result in an additional $1,053 per month in retirement benefits. Similarly, waiting until 66 instead of 62 would increase the monthly benefits by $462 [1].

The decision to retire early should consider factors such as immediate cash flow needs, health conditions, and life expectancy. For those who can afford to wait, the benefits of delaying retirement are substantial. However, for those who need the money immediately or have health concerns, early retirement may be the best option [2].

In conclusion, while retiring at 62 can be necessary for some, it comes with a significant pay cut. Understanding the implications of early filing is crucial for making an informed decision about when to start receiving Social Security benefits.

References:

[1] https://finance.yahoo.com/news/retiring-62-much-may-social-143044379.html

[2] https://www.fool.com/retirement/2025/07/07/the-no-1-reason-to-claim-social-security-at-age-62/