Claiming Social Security at 62 can carry lasting financial costs
Early claims may mean permanently lower payments, earnings-related reductions and private health cover costs before Medicare eligibility.
Claiming US Social Security retirement benefits at 62 can provide earlier income, but a Yahoo Finance article highlights several financial trade-offs for workers weighing the decision.
For people whose full retirement age is 67, claiming at 62 can reduce monthly payments by up to 30%, according to the article. Waiting until full retirement age generally provides the full calculated benefit, while delaying beyond it can increase payments until age 70.
Workers who claim before full retirement age may also face benefit reductions if their earnings exceed annual thresholds. In 2026, the article says, $1 is deducted for every $2 earned above $24,480. In the year a recipient reaches full retirement age, the deduction changes to $1 for every $3 above a higher $65,160 threshold, before ending once full retirement age is reached.
Healthcare costs are another consideration. Medicare generally begins at 65, leaving people who retire and claim at 62 to arrange private cover for the intervening period. The article cites KFF data showing that only 27% of firms with at least 200 employees that offer health benefits extend them into retirement.
Starting benefits earlier may also reduce future cost-of-living adjustments and survivor benefits, because both are linked to the lower initial payment. Social Security is based on a person’s 35 highest-earning years, so leaving work at 62 can also mean missing the opportunity to add higher-earning years to the calculation.
The article stresses that the choice depends on individual health, finances, employment and family circumstances. Its figures and projections, including a possible future reduction in benefits, are not guaranteed outcomes or personalised financial advice.
