Taking SS at 62 while working part-time: Smart strategy or benefit reduction trap?
I'm turning 62 next April and trying to figure out if I should take Social Security early. My full retirement age is 67, but I'm considering taking benefits at 62 and working part-time up to the earnings limit. My benefit would be about $1,750/month at 62 versus $2,600 at 67. I've calculated that I could work part-time making around $21,000 annually without losing benefits (staying under the 2025 earnings limit). My financial advisor says I'd permanently reduce my benefits by 30% by claiming early, but I'm thinking having SOME income now plus part-time work might be better than waiting 5 years for the full amount. Has anyone done this? Does SSA really penalize you $1 for every $2 you earn over the limit? Would love to hear from people who've actually tried this strategy!
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Nia Johnson
I did exactly this last year and it's worked out pretty well for me. Yes, SSA does withhold $1 for every $2 you earn above the annual limit (which will be $22,320 in 2025 I believe). The calculations can get confusing, but I found keeping my income just under that threshold works best. The biggest advantage is I don't have to touch my 401k yet. The monthly check plus my part-time income covers my basic expenses. Just make sure you understand that your benefit is permanently reduced by taking it early - that 30% reduction is for life.
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Luca Conti
•Thanks for sharing your experience! Did you find the process of reporting your earnings to SSA complicated? I'm worried about accidentally going over the limit and then owing them money back.
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CyberNinja
This strategy can work well for some people, but there are several factors to consider: 1. The reduction for claiming at 62 is permanent - your benefit will always be 30% lower than your FRA amount 2. The earnings limit ($22,320 for 2025) applies until you reach your Full Retirement Age 3. Any benefits withheld due to excess earnings aren't truly lost - they get added back after you reach FRA in the form of a slightly higher monthly benefit 4. Consider your longevity - if you expect to live well into your 80s or beyond, waiting until FRA or even age 70 often provides more lifetime benefits 5. Taxation - up to 85% of your SS benefits may be taxable depending on your combined income Every situation is unique, so what works for some might not be optimal for you. Have you run calculations for different scenarios?
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Luca Conti
•I didn't realize that withheld benefits get added back later! My financial advisor never mentioned that part. I'm in decent health but both my parents died in their early 70s, so longevity isn't necessarily on my side. What type of calculator would you recommend for comparing different scenarios?
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Mateo Lopez
my sister started ss at 62 and worked at walmart part time. she said its REALLY IMPORTANT to track ur earnings cuz if u go over they take back money and its a huge mess!!!! she went over by like $600 one year and had to pay back way more than that. dont know why the system is so complicated!!!!
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Nia Johnson
•This is true - tracking your earnings is crucial. I keep a spreadsheet and check it monthly to make sure I stay under the limit. If you do go over, SSA doesn't just take back what you owe - they often withhold entire monthly payments until the overpayment is resolved, which can really disrupt your budget.
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Aisha Abdullah
I take my SS early and then lost half of it when I took an extra shift at my nursing job. The whole system is rigged against working people if you ask me. They don't even tell you clearly about these limits when you sign up! I had to learn the hard way when they just STOPPED my payment one month with barely any notice. Still mad about it.
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Ethan Davis
•The earnings limit can definitely catch people by surprise. For anyone considering this strategy, I highly recommend using the SSA's Retirement Earnings Test Calculator on their website. It helps you estimate how much of your benefit might be withheld based on your projected earnings. Another option worth considering is seeing if your employer would defer some income until after you reach FRA, when the earnings test no longer applies.
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Yuki Tanaka
Does anyone know if the $22,320 limit is before or after taxes? And does it include things like 401k contributions or just take-home pay? Im planning to do this next year two but all the SS rules are confusing me
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CyberNinja
•The earnings limit applies to your gross wages before taxes. It includes your wages before any deductions for taxes, health insurance, or retirement plans like 401(k) contributions. It does not include investment income, pension payments, or other government benefits. Self-employment income counts as net earnings (after business expenses but before income tax deductions). Hope that helps clarify things!
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Luca Conti
I'm learning so much from everyone's responses - thank you! One more question: if I start taking SS at 62 and work part-time, but then stop working completely at 65, would my benefit amount ever increase? Or am I permanently stuck with the reduced amount?
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Ethan Davis
•You'd still be permanently reduced by taking benefits at 62. However, there are two ways your benefit might increase slightly: 1. If you had benefits withheld due to exceeding the earnings limit, you'll get an adjustment when you reach Full Retirement Age that accounts for the months benefits were withheld. 2. If your part-time work years are higher-earning than some of the years currently being used to calculate your benefit (SSA uses your highest 35 years), your benefit could increase slightly through recalculation. Neither of these would fully offset the reduction for claiming early, though. The decision really depends on your individual circumstances - health, other income sources, and immediate financial needs.
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Mateo Lopez
i heard somewhere that if u work while getting ss that it can actually INCREASE ur benefit later on. is that true or just a rumor?? 🤔
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CyberNinja
•This is partially true! SSA recalculates your benefit annually. If your recent earnings are higher than one of the 35 years used in your original calculation, your benefit could increase slightly. However, this is typically a small amount and won't offset the reduction from claiming early. The bigger impact comes from the annual COLA (Cost-of-Living Adjustment) increases that everyone receives regardless of whether they're working or not.
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Aisha Abdullah
Why bother with all this complicated math??? Just enjoy life and take the money when you can get it! No one knows how long we have anyway. My neighbor waited until 70 to maximize his SS benefit and then dropped dead 3 months later. All that waiting for nothing!
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Luca Conti
•That's actually one of my biggest fears - waiting and then not living long enough to benefit from the higher amount. With my family history, I'm leaning toward taking it at 62, even with the reduction. I just want to make sure I understand all the implications of working part-time with it.
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Ethan Davis
One often overlooked aspect of taking SS early while working part-time is the effect on Medicare premiums later. If your combined income (SS benefits + work income + other income) exceeds certain thresholds, you could pay higher Medicare Part B and D premiums when you enroll at 65. This is called IRMAA (Income-Related Monthly Adjustment Amount). It's based on your tax return from two years prior, so work income at 63-64 could affect your Medicare costs at 65-66. Worth factoring into your calculations!
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Luca Conti
•Wow, I hadn't even considered the Medicare premium angle. That's definitely something I need to research more before making my decision. This is getting more complicated than I thought!
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