Key Points
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You can only claim benefits for your birth month if you were born on the first or second.
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Also know that claiming checks at 62 will reduce your benefit amount by 30%.
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Finally, working seniors could lose additional funds to the earnings test.
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If you’re turning 62 in 2027, you have a big decision to make. You could claim Social Security benefits as soon as you’re eligible to get the maximum number of checks. Or you could wait a few months or years to apply so that each check is larger.
There is no right or wrong here, and a lot depends on your individual circumstances. But if you’ve been thinking about signing up as soon as you become eligible, there are a few important rules you’ll want to be aware of. Let’s review them.
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1. You may not be eligible in your birth month
You may only claim a Social Security benefit in your birth month if you were born on the first or second of that month. If you were born on any other day, you don’t become eligible until the month following your 62nd birthday.
This has significant implications for your retirement budget, particularly if you’re born later in the month. Remember, Social Security benefits go out on either the second, third, or fourth Wednesday of the month following the month in which they’re due.
If you were born on Jan. 21, for example, your first month of eligibility will be February 2027. Those checks will go out on the fourth Wednesday of March. Make sure you have a plan for how you’ll cover your expenses while you’re waiting on your first check to arrive.
2. You could reduce your checks by up to 30%
Claiming Social Security at age 62 carries a 30% early withdrawal penalty if your full retirement age (FRA) is 67. This is the case for everyone born in 1960 or later. Exactly how much that shrinks your benefit will vary depending on the size of the checks you initially qualify for. But it will likely knock hundreds of dollars off your monthly payment amount.
If this concerns you, you might prefer to wait a few months or years before you apply. It will permanently increase the size of your monthly checks, and it could lead to a bigger lifetime benefit, depending on your life expectancy. However, if you decide to do this, you will have to cover your living expenses on your own for longer.
3. You could lose money to the earnings test if you’re still working
Working while under your FRA could cause you to lose money to the earnings test if you make more than a certain amount from your job throughout the year. In 2027, you can lose $1 for every $2 you earn over $25,560 if you’ll be under your FRA all year. This threshold is higher than the 2026 limits. But it’s still low enough that it could cost you entire months of checks if your income is high.
Money you lose to the earnings test isn’t gone forever. The Social Security Administration will give you a one-time benefit boost when you reach your FRA. But that doesn’t help you in the short term. Make sure you have another way to cover what your checks won’t, or else consider delaying your benefits until you either retire or reach your FRA, when the earnings test no longer applies.
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