Social Security earnings test penalty at 62 - if returned at FRA, why not claim early while working?

The earnings test isn't quite as simple as you're describing. When SSA withholds benefits due to excess earnings, they do recalculate your benefit at FRA to give you credit for the months you didn't receive a check. This is called the "adjustment to the reduction factor" (ARF). The downside is that you're still locking in a permanently reduced benefit compared to waiting until FRA or age 70. Let's say your FRA benefit would be $2,500/month. If you claim at 62, it's reduced by about 30% to $1,750/month. Even if some checks are withheld and you get the ARF adjustment, your base amount is still substantially reduced. Consider also: 1. Any spousal or survivor benefits based on your record will be calculated from your reduced amount 2. COLA increases will be applied to a smaller base amount for life 3. If you plan to live past your early 80s, you'll likely collect more lifetime benefits by waiting Every situation is different though. If you have health concerns or need the income regardless of potential reductions, claiming early might make sense for you.

ive been thru this EXACT thing. claimed at 62 cuz why not? still working full time making good $$ and guess what? didnt see a SINGLE CHECK for almost 3 years cuz of that dumb earnings test!!! when i hit my FRA they adjusted it but i still get way less than my coworker who just waited till 66 to file. dont make my mistake!!

This is an interesting question. I think it depends on your financial situation and long-term plans. If you don't actually need the SS money right now while working, then why take the permanent reduction? The adjustment they give you later doesn't fully make up for taking benefits early. On the other hand, if you claim at 62 and then lose your job unexpectedly, you'd already be in the system and receiving benefits, which could be helpful during a transition period.

You're making a common misconception about how the adjustment works at FRA. Let me break this down with some numbers to show why waiting is usually better if you're still working: Example: Your FRA benefit would be $2,000/month at age 67. Option 1 - Claim at 62 while working: - Initial benefit: $1,400/month (30% reduction) - Due to earnings, all benefits withheld for 5 years - At FRA (67), SSA adjusts your benefit to about $1,680/month Option 2 - Wait until FRA to claim: - Benefit at 67: Full $2,000/month Option 3 - Wait until 70 to claim: - Benefit at 70: $2,480/month (24% increase) The adjustment you get isn't enough to offset the permanent early claiming reduction. Plus, there are tax implications to consider - if you're working full-time, up to 85% of your Social Security could be taxable. This is why financial advisors typically recommend waiting if you're still earning good income. The only people who benefit from your strategy are those who stop working entirely shortly after claiming.

Has anyone here actually CALLED the SSA to ask about this??? I tried for TWO WEEKS to get through to someone who could explain this to me when I was deciding when to file!!! Every time I called I'd wait on hold for 2+ hours only to get disconnected!!! SO FRUSTRATING!!! Their website doesn't explain this stuff clearly AT ALL and the calculators don't account for the earnings test adjustment thing everyone's talking about!!!!

My husband just went thru this. He filed at 62 but kept working. His checks kept getting reduced cuz of the earnings test. By the time he reached FRA last year they did adjust his benefit but he's still getting way less than if he'd just waited. We did the math and he'd have to live to 89 to break even by claiming early. The lesson for us was if ur gonna keep working full time past 62 just wait to file!!

The other thing to consider is spousal benefits. If your spouse might claim on your record someday, filing early permanently reduces what THEY can get too. My wife gets 50% of my benefit as a spouse, so me filing early would have hurt both of us for life.

wait i just realized something else - if ur earning enough to trigger the earnings test u probably don't even NEED the SS money right now?? so why take the permanent hit?? just wait and get the bigger check later!!

One strategy some people use is to file at 62 if they anticipate working less in the coming years. For example, if you're planning to go part-time at 63, it might make sense to file at 62, have some benefits withheld the first year, then start collecting when your income drops below the threshold. This works best if: 1. You're planning to reduce work hours soon after 62 2. You want to retire before FRA but after 62 3. Your life expectancy is uncertain due to health concerns Just remember the reduction is permanent - the adjustment at FRA only accounts for months benefits were completely withheld, not the early claiming reduction itself.

Another important consideration is tax efficiency in retirement planning. If you're still working full-time at a good salary, adding Social Security income could push you into a higher tax bracket. Up to 85% of your Social Security benefits become taxable when your combined income exceeds certain thresholds. For 2025, if your combined income (adjusted gross income + nontaxable interest + half of SS benefits) exceeds $34,000 (single) or $44,000 (married filing jointly), 85% of your benefits are subject to income tax. So claiming early while working could not only reduce your lifetime benefit but also result in higher taxes during those working years compared to waiting until you've stopped working or reduced your hours.