The earliest age people can claim Social Security is also the most popular, with 22.9% of men and 24.5% of women signing up at 62 in 2022, according to the Social Security Administration. Those who apply at this age receive the most checks possible, but that doesn't always translate to the largest lifetime benefit.
Here are three reasons you might get less than you expected by claiming Social Security at 62.
Image source: Getty Images.
1. Claiming early shrinks your benefit
Applying for Social Security at 62 is technically considered early claiming. The government assigns everyone a full retirement age (FRA) based on their birth year. The following table will help you find yours:
|
Birth Year |
Full Retirement Age (FRA) |
|---|---|
|
1943 to 1954 |
66 |
|
1955 |
66 and 2 months |
|
1956 |
66 and 4 months |
|
1957 |
66 and 6 months |
|
1958 |
66 and 8 months |
|
1959 |
66 and 10 months |
|
1960 and later |
67 |
Source: Social Security Administration.
When you claim under your FRA, the Social Security Administration shrinks your checks by:
- 5/9 of 1% per month for up to 36 months of early claiming
- 5/12 of 1% per month for every additional month of early claiming beyond 36 months
Put another way, when you apply for Social Security at 62, you shrink your check by 25% to 30%, depending on your FRA. If you qualified for the $1,909 average monthly benefit at your FRA, you'd only get $1,336 to $1,432 per month by claiming at 62.
This doesn't mean claiming early is always a poor choice, though. It's often the best decision for those who cannot cover their essential expenses alone and those who have short life expectancies. But if neither of those apply to you, you may get more money by waiting to sign up.
You can even delay benefits past your FRA. This will grow your checks by 2/3 of 1% per month until you reach 70. That could net you 124% of your full benefit if your FRA is 67 or 132% if your FRA is 66.
2. You could lose money to the earnings test
The Social Security earnings test withholds money from seniors who are earning over a certain amount from their job while also claiming Social Security under their FRA. In 2024, you lose $1 for every $2 you earn over $22,320 if you'll be under your FRA all year. Those reaching their FRAs in 2024 only lose $1 for every $3 they earn over $59,520 if they earn this much before their birthday.
But unlike the benefit reduction discussed above, this loss isn't permanent. When you reach your FRA, the government increases your benefit slightly to give you back the money it previously withheld. However, your new and improved benefit will still be smaller than what you would have gotten had you delayed Social Security until your FRA in the first place.
3. Seniors on Medicare have their Part B premiums withheld
Most seniors who are claiming Social Security and Medicare have their Part B premiums withheld from their checks. This is $174.70 per month for most Medicare beneficiaries in 2024.
It's not technically a loss, because if your premium costs weren't withheld from your checks, you'd get billed for them. But it's still something seniors should be aware of so they aren't caught off guard by smaller-than-expected checks.
Other reasons you might get less money from Social Security than expected
These are the three most common reasons you might get smaller Social Security checks than expected, but there are others. For example, if you fail to pay child support or you owe the IRS back taxes, the government can garnish your Social Security checks to pay off these debts.
If you ever have questions about your benefit, it's worth a quick call to the Social Security Administration. Clerical errors can happen too, so it's better to be safe than sorry.
