Deciding when to start receiving Social Security is one of the most significant financial choices you'll make for retirement. While the option to begin payments at age 62 is appealing, it's crucial to understand the long-term trade-offs. Claiming benefits early results in a permanent reduction to your monthly checks, a decision that impacts your income for the rest of your life.
Understanding Full Retirement Age (FRA)
Your Full Retirement Age (FRA) is the age at which you are entitled to 100% of your Social Security benefits, based on your earnings record. This age is not the same for everyone; it's determined by your birth year [1.3.1].
- Born 1943-1954: Your FRA is 66 [1.3.2].
- Born 1955-1959: Your FRA gradually increases from 66 and 2 months to 66 and 10 months [1.3.2].
- Born 1960 or later: Your FRA is 67 [1.3.2].
Knowing your FRA is the essential first step because all calculations for early or delayed retirement are based on this benchmark.
The Penalty for Early Retirement: How Benefits Are Reduced
If you start your benefits at age 62 and your FRA is 67, your monthly payment will be permanently reduced by 30% [1.2.8]. For an FRA of 66, the reduction at age 62 is 25% [1.2.8]. This reduction is calculated on a monthly basis. For every month you receive benefits before your FRA, the reduction is approximately 5/9 of 1% for the first 36 months, and then 5/12 of 1% for each additional month.
This reduction is permanent and also affects the base amount for any future Cost-of-Living Adjustments (COLAs), meaning you'll receive smaller dollar-amount increases over time compared to someone who waited until FRA [1.2.3].
How Your Social Security Benefit Is Calculated
Your benefit amount, known as the Primary Insurance Amount (PIA), is determined by a complex formula based on your lifetime earnings.
- Your Earnings History: The Social Security Administration (SSA) looks at your highest 35 years of earnings, adjusted for inflation [1.2.4]. If you have fewer than 35 years of earnings, zeros are entered for the missing years, which can lower your benefit amount.
- Average Indexed Monthly Earnings (AIME): The SSA averages these 35 years of indexed earnings to calculate your AIME.
- Primary Insurance Amount (PIA): A formula is applied to your AIME to calculate your PIA—the benefit you would receive at your Full Retirement Age.
- Early Retirement Reduction: If you claim at 62, the permanent reduction percentage is applied to your PIA to determine your actual monthly payment.
2025 Benefit Amounts: Average vs. Maximum
While your personal benefit is unique to your earnings record, it's helpful to know the national figures for 2025.
- Maximum Benefit at Age 62: For an individual retiring at 62 in 2025, the maximum possible monthly benefit is $2,831 [1.5.3]. To receive this, you would have needed to earn the maximum taxable income for at least 35 years.
- Average Benefit: The average monthly benefit for all retired workers was estimated to be around $2,008 in August 2025 [1.4.2]. However, the estimated average for someone specifically retiring at 62 is lower, around $1,362 in 2025 [1.4.4].
Comparison: Retiring at 62 vs. FRA vs. 70
Delaying benefits past your FRA earns you delayed retirement credits, which increase your benefit by about 8% per year until age 70 [1.2.4]. For someone with an FRA of 67, waiting until 70 results in a benefit that is 124% of their PIA [1.2.7].
| Retirement Age | Percentage of Full Benefit | Example Monthly Benefit* |
|---|---|---|
| 62 | 70% | $1,750 |
| 67 (FRA) | 100% | $2,500 |
| 70 | 124% | $3,100 |
This is a hypothetical example for someone with a PIA of $2,500 and an FRA of 67.
Other Factors That Impact Your Benefits
Several other factors can influence your Social Security income.
- Working While Claiming: If you are under your FRA for the entire year of 2025, your benefits will be reduced by $1 for every $2 you earn above the annual limit of $23,400 [1.6.1, 1.6.3]. Once you reach FRA, this earnings limit no longer applies.
- Taxation of Benefits: Depending on your combined income (adjusted gross income + non-taxable interest + half of your Social Security benefits), a portion of your benefits may be subject to federal income tax.
- Spousal & Survivor Benefits: Your decision to claim early can also impact the potential benefit amount for your spouse or surviving spouse. A surviving spouse's benefit is limited by what the deceased worker was receiving [1.2.4].
Conclusion: Is Retiring at 62 Right for You?
Claiming Social Security at 62 provides income sooner, which might be necessary due to health, job loss, or personal preference. However, it comes at the cost of a permanently smaller monthly payment. This decision requires a careful evaluation of your health, longevity expectations, savings, and overall retirement income plan. For a personalized estimate of your benefits at different retirement ages, it is highly recommended to create an account and use the tools on the official Social Security Administration website.
