For most U.S. citizens, Social Security income is an absolute necessity. In 22 years of annual surveys conducted by the national pollster Gallup, no fewer than 80% of retired respondents have stated that they rely on their Social Security check as a “major” or “minor” source of income.
Given how vital America’s premier retirement program has been since the first benefit check was handed out in January 1940, it’s important for future retirees to get all they can from Social Security. However, a popular age for claiming benefits (age 62, the earliest age at which retired workers can receive benefits) may be working against them.
Before delving into the details of the average Social Security benefit at age 62, as well as the pros and cons of an early claim, it is important to first understand how your Social Security benefit is calculated.
How the monthly Social Security check is calculated
When it comes down to the basic check, there are four factors that directly affect retired workers’ payments:
Full retirement age
The first two components, your work history and your earnings history, are linked. When the Social Security Administration (SSA) calculates your monthly retired-worker benefit, it does so by taking into account your 35 years of inflation-adjusted work with higher earnings.
Not only will you want to earn as much as possible, up to the maximum taxable earnings limit, each year, but you will also want to work for a minimum of 35 years if you have any hope of maximizing what you will get from the program.
The third factor, your full retirement age, is determined by your year of birth. It represents the age at which you are eligible to get 100% of your retired worker benefit. All persons born in 1960 or later have full retirement age at age 67.
What is the average Social Security benefit at age 62?
With a better understanding of how certain factors can affect what you will get from Social Security, let’s take a closer look at what early contributors (those who do so at age 62) can expect.
As you can see in the table above, future retirees who get their benefit at age 62 take a permanent 30% reduction each month. In turn, they gain access to their monthly payments years earlier than future retirees who chose to wait and allow their monthly benefit to grow. In 2022, nearly one-quarter of new retired worker applications were filed at age 62.
According to SSA data, the 565,887 retired workers who were 62 and getting a Social Security benefit in December 2022 were taking home $1,274.87 a month, or about $15,298 on an annualized basis.
Typically, there are two reasons why workers opt to get their payment as soon as possible. The most logical of these reasons is their personal health. Since the goal should be to generate as much lifetime income as possible through Social Security, people with one or more chronic health conditions that have the potential to shorten life expectancy may benefit from getting their payment early. Admittedly, this is a bit of guesswork, since none of us knows the final date of our demise. However, personal health tends to play a key role in a number of early claims.