For many Americans, turning 62 represents a significant life milestone, but its meaning varies greatly depending on an individual's financial and health situation. The most prominent aspect of this age is the ability to begin collecting Social Security benefits, but doing so comes with a permanent reduction in your monthly income. The years between 62 and 65, when Medicare eligibility begins, require careful planning for healthcare and finances. This guide explores the different facets of turning 62, helping you understand the implications and make informed decisions.
Social Security: The Early Claiming Decision
The most critical financial decision for someone turning 62 is when to start taking Social Security benefits. While tempting, early claiming permanently reduces your monthly benefit. For those born in 1960 or later, the full retirement age (FRA) is 67. Claiming benefits at age 62 for this group results in a permanent 30% reduction in their monthly payment. Delaying benefits until age 70, in contrast, results in a significantly higher monthly benefit for life. A person's health, financial needs, and life expectancy all play a role in this complex choice.
Factors Influencing Your Social Security Claiming Strategy
- Health and Longevity: If you have a family history of longevity and are in good health, waiting to claim higher benefits may be more financially advantageous in the long run. Conversely, poor health may make early claiming a more practical necessity.
- Spousal and Survivor Benefits: For married couples, the claiming decision is more complex. The survivor benefit is based on the deceased spouse's monthly benefit. By delaying, you not only increase your own potential payout but also your surviving spouse's benefit.
- Continued Employment: If you plan to continue working after age 62, your earnings could trigger Social Security's earnings test, which temporarily reduces or suspends your benefits if you earn above a certain limit. This rule disappears once you reach your FRA, making delaying benefits while working a more viable strategy.
Health Insurance: Bridging the Gap to Medicare
One of the most significant challenges for early retirees is securing health insurance coverage before qualifying for Medicare at age 65. Without employer-sponsored insurance, the costs for private health coverage can be substantial and quickly deplete retirement savings.
Health Coverage Options Before Medicare
- ACA Marketplace Plans: The Health Insurance Marketplace, created under the Affordable Care Act, provides health plans with potential subsidies based on income. This can be a more affordable alternative to private insurance, especially for those with lower retirement income.
- COBRA: This federal law allows you to temporarily continue your health coverage from a former employer for a limited time, usually 18 months. However, you must pay the full premium, which can be expensive.
- Health Savings Account (HSA): If you've been contributing to an HSA, you can use the tax-advantaged funds to pay for qualified medical expenses in retirement, including premiums for COBRA, until Medicare kicks in.
A Comparison of Claiming Social Security Early vs. Late
The following table summarizes the key considerations for claiming Social Security benefits at 62 versus waiting until age 70 for someone whose full retirement age is 67.
| Feature | Claiming at Age 62 (Early) | Claiming at Age 70 (Delayed) |
|---|---|---|
| Monthly Benefit | Permanently reduced by up to 30% | Permanently increased by 24% over FRA |
| Lifetime Income | Lower total payout if you live past the break-even age (typically late 70s to early 80s). | Higher potential lifetime benefits, especially with good health. |
| Flexibility | Provides immediate income, useful for those who need cash flow or have shorter life expectancies. | Allows more years of tax-advantaged investment growth and higher monthly payments later. |
| Work Penalties | Benefits may be temporarily reduced if you earn above a certain limit while working. | No earnings test; you can work and earn any amount without penalty. |
| Impact on Spouse | Results in a smaller potential survivor benefit for your spouse. | Results in a larger potential survivor benefit for your spouse. |
Lifestyle and Psychological Transitions
Beyond financial considerations, turning 62 is part of a larger life transition. Many people in their early 60s are still active and seeking new purpose, whether through a phased retirement, an "encore career," or volunteering. Society's view of this age is also changing, with many people challenging outdated stereotypes about aging.
Navigating the Next Chapter
- Phased Retirement: Instead of a sudden stop, many people reduce their hours or transition to a part-time consulting role. This eases the psychological shift and can provide supplementary income.
- Pursuing Passions: With more free time, age 62 can be the perfect time to explore long-neglected hobbies or interests. This can lead to improved emotional well-being and a stronger sense of purpose.
- Staying Engaged: Avoiding social isolation is crucial. Volunteering, taking up a class, or joining a community group can provide intellectual stimulation and social connection.
Health and Wellness in Your Early 60s
As with any stage of life, physical and mental health are key to a high quality of life. The early 60s are a time to proactively manage health, focusing on wellness to help prevent age-related issues down the road.
Prioritizing Health After 60
- Physical Activity: Regular exercise helps maintain muscle mass, bone density, and cardiovascular health. Low-impact activities like walking, swimming, or yoga are excellent choices.
- Healthy Diet: A balanced diet rich in fruits, vegetables, and lean protein supports overall health. Ensuring adequate hydration and focusing on nutrients like calcium and vitamin D is important for bone health.
- Cognitive Stimulation: Keeping the brain active through puzzles, reading, learning a new skill, or staying socially engaged helps maintain cognitive function.
Conclusion
Ultimately, there is no single answer to "what is 62 years old considered?" It is a pivotal age defined by options, opportunities, and personal circumstances. It's the earliest entry point for Social Security, but with financial consequences that require careful consideration. The years between 62 and 65 demand a strategy for health insurance and managing the transition from full-time work. By approaching this age with a proactive mindset, individuals can plan for a fulfilling and financially secure next chapter of their lives, rather than viewing it as a simple endpoint. The decision-making process at 62 involves balancing current needs with long-term goals, whether that means embracing immediate retirement or planning for a robust future.
