I turned 62 in January. And for years, I assumed I’d do what most financial experts recommend: wait. Wait until 67 — my full retirement age. Or better yet, wait until 70 to lock in the maximum benefit.
The logic seemed airtight. Your benefit grows roughly 6.7% per year between ages 62 and 67 (The benefit grows at 8% between 67 and 70). In a world where safe 6% returns are hard to find, that growth sounds like a no-brainer. So, I planned to wait.
Then I actually ran the numbers — all of them. And I changed my mind.
Here’s how I thought through the decision to take Social Security at 62, and how you can approach yours.
The Breakeven Math: What the Calculators Don’t Always Show You
Most Social Security calculators focus on one number: breakeven age. And yes, that matters. But the way they present it often leaves out two critical factors that change the entire picture. The Cost-of-Living Increases (COLA) and the Time Value of Money.
The Real Differential Is Smaller Than You Think
Yes, waiting from 62 to 67 increases your monthly benefit by about 6.7% per year. That sounds significant. But here’s what most people miss: the moment you start collecting at 62, your benefit starts receiving annual Cost of Living Adjustments (COLA).
Since 1975, Social Security COLA increases have averaged over 3% per year. That means your early benefit isn’t frozen — it grows every year too. So that 6.7% annual advantage of waiting shrinks to roughly 3.7% when you account for COLA on the early benefit.
| The real annual advantage of waiting from 62 to 67 isn’t 6.7% — it’s closer to 3.7%, once you factor in COLA growth on the earlier benefit. |
A Dollar Today Is Worth More Than a Dollar Tomorrow
The second thing calculators underweight: the time value of money. If I start collecting $1,400/month at 62, I have that money now — to invest, to cover expenses, or simply to avoid drawing down a portfolio during a down market. That’s real, tangible value.
Waiting until 67 means forgoing five years of payments. In our example, that’s $84,000 in payments you’ll never recoup until you reach your breakeven age — and that breakeven calculation doesn’t factor in what you could have done with those dollars in the meantime. In today’s market – you might be able to invest that money and make 7%, 8% or even more.
The Breakeven Reality: A Comparison Table
Let’s make this concrete. Here’s how the numbers look using $1,400/month as the age-62 benefit (your numbers will vary — log in to ssa.gov to find yours):
| Claiming Age | Est. Monthly Benefit* | 5-Year Total | Breakeven vs. Age 62 | Go-Go Years? |
| Age 62 | $1,400 | $84,000 | — | ✓ Yes |
| Age 67 | $2,000 | $0 (waiting) | ~Age 81 | Maybe |
| Age 70 | $2,480 | $0 (waiting) | ~Age 83 | Less Likely |
*Example only. Your actual benefit depends on your earnings history. Visit ssa.gov for your personal estimates.
To break even on waiting until 67, you’d need to live to around age 81. Waiting until 70 pushes that breakeven to roughly 83. Factor in COLA on the earlier benefit, and those breakeven points shift even further out.
What I Know: The Measurable Factors
1. Start With Your Own Numbers
Before anything else, go to ssa.gov and log in to your account. Pull your estimated benefits at ages 62, 67, and 70. Confirm you’ve earned enough credits to qualify.
| Tip: If you stayed home to raise children, look into spousal benefits — you may qualify even without enough work quarters of your own. Visit ssa.gov/oact/quickcalc/spouse.html to learn more. |
2. COLA Starts Working for You Immediately
As I mentioned above, once you claim, your benefit gets annual COLA adjustments. The 3% historical average is meaningful over time — especially if you’re planning for a 20-to-30-year retirement. Don’t let anyone tell you that early benefits are “locked in” at a permanently reduced amount. They grow. Every year.
3. The Market Is Unpredictable — and Sequence of Returns Matters
Right now, the stock market is rocky. One of the most underappreciated risks in early retirement is sequence-of-returns risk: the danger of being forced to sell investments when they’re down to cover living expenses. Taking Social Security now helps me avoid pulling from my portfolio during a downturn and gives those investments time to recover. (For more on this, read my post on Sequence of Risk.)
4. My Lifestyle Priorities
I want to travel while I’m healthy, play golf, and spend time with my grandkids. These aren’t “someday” dreams — they’re now goals. And I’ve heard it said this way: your 60s are your Go-Go Years. Your 70s become the Slow-Go Years. By your 80s, many people are in No-Go mode.
I want to enjoy the Go-Go Years fully. Early Social Security helps fund that.
5. Tax Considerations
Yes, 85% of my benefits are taxable because our combined household income exceeds $44,000 (for married couples). But only that 85% is subject to income tax — at around 20% for our bracket. That makes the effective tax rate on my full benefit about 17%. Manageable.
There’s also ongoing discussion in Washington about eliminating or reducing taxes on Social Security income. If that happens, early claimers would benefit right along with everyone else — and every check already received would have been tax-efficient.
What I Don’t Know: The Unpredictable Factors
1. Longevity
This is the morbid but unavoidable question: how long will I live? If I delay benefits and pass away before the breakeven age, I’ve left money on the table. If I live to 90, waiting would have paid off. There’s simply no way to know.
What I do know is my current health, my family history, and my desire to live well now — not just efficiently on paper.
2. The Future of Social Security
You may have heard that Social Security faces funding challenges around 2033. It’s worth understanding what that actually means: the program isn’t going away. What may happen is a reduction in benefits if Congress doesn’t act — somewhere in the range of 20-25% cuts to scheduled payments. That’s a real risk to factor in, especially if you’re planning to rely heavily on a delayed, maximized benefit.
Claiming earlier locks in payments now, before any potential legislative changes. It does not guarantee that those benefits might be reduced as well.
3. Inflation and Market Volatility
We can’t predict either. A high-inflation environment actually helps Social Security recipients through higher COLA adjustments — which again benefits early claimers. And in a volatile market, having guaranteed monthly income reduces your reliance on investment withdrawals.
Tools to Help You Run Your Own Numbers
If you want to model your own scenarios, tools like Maximize My Social Security can be helpful starting points. Just be aware of their limitations: most default toward recommending age 70 and may not fully account for:
- COLA growth beginning at age 62
- The time value of money and what early payments could do for your cash flow
- Current market conditions and sequence-of-returns risk
- Your personal lifestyle goals and spending priorities in your 60s
The ssa.gov website itself is the most reliable source for your actual projected benefit amounts. Start there.
Final Thoughts
Social Security isn’t one-size-fits-all. It never has been. The “right” answer depends entirely on your health, your goals, your savings, and what you actually want your retirement to look like.
For me, the math pointed toward 62 — once I included COLA, time value of money, market volatility, and the very real probability that my most active years are now, not in my 80s. Mike and I are building a plan that balances present-day cash flow with long-term security, and I’ll share more about how we’re coordinating our benefits as a couple in a future post.
Whatever you choose, do your research. Run your personal numbers. And if you can, talk with a fee-only financial advisor who can look at your whole picture.
Thanks for reading — and whatever you decide, I hope it supports the life you actually want to live.
Social Security as a Couple: The Strategic Play Most People Miss
One of the smartest — and most overlooked — Social Security strategies involves coordinating benefits with your spouse. If one of you earns significantly more (or even roughly the same), you don’t have to make the same claiming decision. In our case, I claimed at 62 while my husband Mike is delaying his benefits. This gives us real cash flow now, during our Go-Go Years, while his higher benefit continues to grow.
Here’s why that matters beyond just the monthly check: if one spouse passes away, the surviving spouse keeps the higher of the two benefits — not both, just the larger one. So by delaying Mike’s benefit, we’re essentially buying a larger financial safety net for whoever lives longer. It’s not just a claiming decision; it’s a form of longevity insurance.
For couples where one spouse out-earns the other, this split strategy can be one of the most powerful — and underused — moves in retirement planning. Look for a dedicated post on this topic coming soon.
Frequently Asked Questions About Taking Social Security at 62
What is the breakeven age for taking Social Security at 62 vs. 67?
If you claim at 62 instead of 67, you generally reach your breakeven point around age 80-81, depending on your specific benefit amounts. This means if you live past 81, you would have collected more by waiting. If you live a shorter life, claiming early puts more money in your pocket overall.
Does Social Security at 62 include COLA increases?
Yes. Once you begin collecting Social Security at any age — including 62 — your benefit receives annual Cost of Living Adjustments (COLA). Since 1975, COLA has averaged roughly 3% per year. This means your early benefit grows over time and is not permanently “locked” at the age-62 amount.
How much less do you get if you take Social Security at 62?
Claiming at 62 rather than your full retirement age (67 for most people today) reduces your monthly benefit by up to 30%. However, you receive payments for five additional years, and those payments include annual COLA increases. The real annual disadvantage of claiming early — after accounting for COLA — shrinks from the commonly cited 6.7% per year to roughly 3.7% per year.
Is it better to take Social Security early and invest it?
It depends on your investment returns, tax situation, and health. If you can invest early Social Security payments at a consistent return that exceeds the roughly 3.7% effective annual advantage of waiting (after COLA), early claiming may come out ahead financially. But most people aren’t evaluating this in purely mathematical terms — lifestyle, health, and cash flow flexibility all factor in.
Will Social Security run out of money?
The Social Security trust fund faces projected shortfalls around 2033, but the program itself will not disappear. Even without Congressional action, incoming payroll taxes would still fund roughly 75-80% of scheduled benefits. Most experts expect lawmakers to act before cuts occur, but the uncertainty is real and worth considering in your planning.
Can married couples claim Social Security at different ages?
Absolutely — and for many couples, this is the smartest move available. One spouse can claim early (at 62) for immediate cash flow while the higher earner delays to grow their benefit. When one spouse passes away, the survivor keeps the higher of the two benefits. So delaying the larger benefit acts as longevity insurance for whoever lives longer. This is exactly the strategy my husband Mike and I are using.
Related reading: Protecting the First Decade of Retirement