Do you regret taking Social Security at 62? What to do if the decision worries you (and why younger Boomers should be careful)

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Do you regret taking Social Security at 62? What to do if the decision worries you (and why younger Boomers should be careful)

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If you claimed Social Security as soon as you became eligible, you’re in a very big club. About 30% of plan beneficiaries, as of 2024, make their first claim at age 62, according to the Bipartisan Policy Center (1).

With the ongoing payment crisis, it’s easy to see why nearly one in three adults sign up for monthly payments as soon as they’re legally eligible. But for many of these early retirees, the decision to sign up for benefits at 62 can haunt them in the long run.

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If you’re one of these regretful beneficiaries, here’s what you need to know.

Early regret

The biggest solution to an early claim is a reduction in benefits. For most people born after 1960, the full retirement age is 67 and claiming benefits early comes with a reduction in monthly payments of up to 30%, according to the Social Security Administration (2).

That means if you qualify for $2,000 a month at age 67, say you’re 62 you can reduce that payment to just $1,400. It’s not just a big gap, it’s also permanent. If you live into your 80s or 90s, the cumulative effect on your lifetime income can be significant.

For many early adopters, this is the root of their regret.

Read more: Thanks to Jeff Bezos, you can own a property for $100 – without the headache of owning one.

What you can do

You can’t turn back time, but the good news is that there are several ways to reduce your fault even after you file your claim.

Most effective is the 12-month cancellation window the SSA gives (3) you. Basically, you can cancel or withdraw your claim for benefits within 12 months of filing, but you must pay any benefits you received during that time. This is a quick, but painful fix.

If you are beyond the 12 month window, there is still an option available. There is a little-known “do over” option available to beneficiaries, according to Fidelity (4). In fact, the SSA allows you to stop benefits at full retirement age (FRA) and enjoy up to a 24% increase in monthly payments by restarting at age 70.

In other words you can stop collecting payments at age 67 and start again at age 70 with most of your income reduced.

To be honest, stopping your benefits for one to three years may not be comfortable. You’ll need to find ways to fill the gap in your income, preferably through savings or a 401(k). You can also borrow against your home equity to cover the gap and pay off the loan once you resume benefits.

AmeriSave offers a flexible HELOC that allows homeowners to borrow against their equity as needed during the drawdown period, making it useful for debt repair or consolidation. The app is widely available online and available in many regions.

It’s a good fit for borrowers who want the convenience and flexibility of a large lump sum loan up front. You can only access funds when you need them, so they are useful for ongoing or unexpected expenses. Interest is charged only on what you spend, and you pay off the balance over time. It’s a flexible line of credit secured by your home, delivered through an online application process.

This HELOC can help you bridge the gap in stopping Social Security for a few years. Once you resume benefits, you can enjoy a larger monthly payment that allows you to pay off the HELOC faster. Just make sure you understand any payment terms before committing.

Pre-retirement studies

If you haven’t applied for Social Security yet, you can avoid these complicated procedures and regrets by simply planning ahead.

Working with an experienced financial planner or tax advisor should help you find the best years to file your claim. An experienced professional can help you find the right balance between monthly payments and your financial needs.

If you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this type of planning.

Simply answer a few questions about your savings, retirement timeline and overall investment portfolio.

From there, WiserAdvisor updates its network to match you – for free – with up to three vetted, reputable advisors who match your specific needs.

You can then schedule a no-obligation consultation with your matches to decide who is the best fit for your long-term goals.

WiserAdvisor is a virtual service and does not directly provide financial advice. All similar advisors are third parties, and specific financial results are not guaranteed.