How Working Past 62 Could Permanently Change Your Social Security Benefit

Retirement is the goal everyone works toward. The dream is to enjoy your remaining years in comfort, living off the fruits of the labor you've put in over decades. For most working people, age 62 is an important milestone. It's the earliest age you can currently claim Social Security retirement benefits.

Data from the Federal Reserve Survey of Consumer Finances estimates that the median U.S. household approaches Social Security eligibility with just $185,000 in retirement savings, making Social Security an important financial crutch for most retirees.

It's tempting to claim Social Security at the earliest opportunity. However, it's an important decision because claiming at 62 reduces your monthly benefits for life. Here are three ways working past 62 can permanently change your Social Security benefit.

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1. Replacing low or non-earning years in your benefits calculation

The average monthly retirement benefit was $2,071 in January 2026. But the precise amount you'll receive depends on your Average Indexed Monthly Earnings (AIME). The Social Security Administration calculates this amount by averaging your monthly earned income over your 35 highest-earning years, adjusted for wage inflation.

But here's the kicker: This calculation will use zeros for any years as needed if you haven't worked 35 years. That's a huge drag on your AIME, which will lower your benefit. Working a few years longer can knock out those zeros if you have them, or replace lower-earning years if you've grown your income over time. Remember, the goal is to maximize your AIME amount.

2. Claiming more at full retirement age

People must understand that 62 is not the full retirement age; it's only the earliest year you can start receiving retirement benefits. For anyone born in 1960 or later, full retirement age is 67.

The Social Security Administration will penalize you for taking retirement benefits before retirement age to the tune of 5/9 of 1% per month for the first 36 months, and 5/12 of 1% per month beyond that. In other words, you could receive as much as 30% less each month if you take benefits at 62 compared to full retirement age.

Of course, someone who begins taking benefits at 62 has a head start on someone who works longer. Mathematically, taking benefits at full retirement age begins to pay off at around age 78, so it does take some time. Ultimately, when you begin taking your benefits is a deeply personal decision that depends on factors such as your health or financial situation.

3. Cashing in delayed retirement credits

There is also a financial incentive to delay taking your retirement benefit beyond full retirement age. The Social Security Administration will add 8% per year to your monthly benefit from ages 67 to 70, potentially increasing your monthly benefit by 24% permanently. That pushes the break-even age to 80 from 78, but also means significantly higher benefits as you age beyond that.

Here are the hypothetical monthly retirement benefits for someone who started working at 22, earned their table maximum each year, and began taking benefits in 2026:

• Age 62: $2,969
• Full retirement age: $4,152
• Age 70: $5,181

If your personal situation allows it, waiting a few extra years beyond full retirement age can add over $1,000 to your monthly benefit.

What matters beyond the numbers

You've already seen it said, but it's worth emphasizing: Deciding when to start taking Social Security retirement benefits is a very personal decision. The math is clear, but life is about much more than numbers. If you're approaching your 60s and are trying to navigate through all of this, it's wise to consult a professional who can help you make the right decision.

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