Retiring Before 62: What You Need to Consider

By Chris Duderstadt

July 19, 2023

Retiring Before 62: What You Need to Consider

Key Points – Retiring Before 62: What You Need to Consider

  • Social Security Works Differently Than Any Other Source of Income
  • Debunking the Theory of Claiming Social Security Being Synonymous with Your Retirement Date
  • Your Decision of When to Claim Social Security Isn’t Just About You
  • Maximizing Your Social Security Benefits
  • 7 Minutes to Read | 23 Minutes to Watch

What Do You Need to Keep in Mind If You’re Retiring Before 62?

One of the first things that our advisors want to know about people at the beginning of the retirement planning process is how they think and feel about money. Some people can hardly wait to retire and want to know how much they need to retire. We see that a lot with people who are thinking about retiring before 62—the age you become eligible to start claiming Social Security benefits.

If you’re one of those people that wants to retire before 62, we get where you’re coming from. Life is short and it’s important to make the most of it by doing the things you love rather than working. But if you’re going to retire before 62, there’s a lot of planning that needs to be done to make that happen.

On the flip side, there are a lot of people who have a very different perspective about money. Those people worry about running out of money in retirement and believe that they can’t retire until a certain point in their life. It’s a valid concern, but how do you overcome that fear so that you can retire successfully? You need a plan for that as well.

Debunking a Misconstrued Retirement Theory

With 62 being the age that you can begin claiming Social Security, there are a lot of people who think that 62 is also when they can retire. While you may be able to claim Social Security at 62, it might not be advisable depending on your plan.

Remember, that you’re playing the long game in retirement. The longer that you delay claiming Social Security, the larger the benefit you’ll receive. And, if you have a significant other, there’s another retirement consideration that comes into play here. The decisions of whether to retire before 62 and when to claim Social Security aren’t just about you. You need to factor your partner into those decisions as well.

“What about your spouse? We need to maximize Social Security for the couple while they’re alive and maximize Social Security for the surviving spouse if one spouse passes prior to the other.” – Dean Barber

We hope that you and your partner live long, happy, and healthy lives, but what if you or your partner passes away expectedly? Suddenly, you or your partner go from jointly filing your taxes to being a single filer. There are a lot of retirement considerations like that for the surviving spouse. One important retirement consideration in a tragic situation where a spouse passes away is that one of the Social Security benefits goes away. You need to know that the surviving spouse gets the larger of the two benefits in that situation.

Maximizing Your Social Security Benefits

Like we said, we hope you or your spouse won’t be in that situation for a long time, but you need to plan for it. We’re actually just getting started with retirement considerations related to Social Security. There are more than 600 iterations that the average 62-year-old couple can claim Social Security. The difference between the best iteration and worst iteration can be a substantial amount of retirement income.

If that last sentence didn’t catch your attention, read it again. Determining how you and your partner claim Social Security needs be thoroughly thought through.

“There are a lot of people who bank on Social Security to be a major source of income in retirement. If somebody is going to retire prior to 62, how do you then factor in whether Social Security should be taken at 62 to stop taking money out of or as much money out of accounts?” – Dean Barber

We took a deeper dive into the many retirement considerations that involve Social Security in our Social Security Decisions Guide. Make sure to download your copy below to get a better idea about how to go about claiming Social Security.

Social Security Decisions Guide

Assessing Your Retirement Cash Flow

Part of why Social Security claiming strategies are so tricky is because Social Security is treated differently than any other income source. Did you know that up to 85% of your Social Security can become taxable? You need to understand that Social Security is a tax-free income source by itself. Unfortunately, it doesn’t play well with other income sources, though, so it becomes taxable at certain levels.

One of the most important retirement considerations should be working with a CFP® Professional and CPA that work alongside each other. Together, they need to go over your financial plan from a tax planning perspective to make sure that you don’t encounter any surprises, such as more of your Social Security becoming taxable.

“You also need to take taxation into consideration when retiring before 62. We talk a lot about doing Roth conversions after you retire. That means you’re going to take money from your traditional IRA and convert it to a Roth IRA while you’re retired.” – Dean Barber

If someone has saved money to an after-tax account, they can live off that—therefore making their taxable income very low—and do a lot of Roth conversions. But if they start taking Social Security too early, that can prohibit larger Roth conversions or throw them up into a higher tax bracket. There are all sorts of things to consider with cash flow and when to claim Social Security if you’re retiring before 62.

“Everything in your plan almost always needs to be looked at from a net perspective. What’s Uncle Sam going to take out of your income that you won’t be able to spend?” – Bud Kasper

Retiring Before Reaching Full Retirement Age

While we’ve been focusing on retiring before 62, we’ve met with several people who don’t believe they can retire until they reach their Full Retirement Age, which is the age you can receive full retirement benefits from Social Security. If you were born in 1955, your Full Retirement Age is 66. It gradually goes up to 67 for those born in 1960 or later.

So many of those people that don’t think they can retire before reaching Full Retirement Age have enough to retire. They just haven’t built a comprehensive financial plan that can give them clarity and confidence about their ability to successfully retire.

No matter when you’re wanting to retire, you need to have a financial plan that takes you to and through retirement. Where do you think you are in the retirement planning process? You can gauge your retirement readiness by reviewing the 30 yes-or-no questions and the age-and date-based timelines in our Retirement Plan Checklist. Download your copy below!

Retiring Before 62

Retirement Plan Checklist

“Everything focuses on the comprehensive financial plan. If you postpone when you go through the plan and see that lack of income, that’s not going to be there because you’re waiting for the reward to come later when you’re 63, 64, 65—whatever the case may be. We can factor all those numbers together and find out what the void is going to be and how you can fill that void.” – Bud Kasper

In the end, when you and your spouse claim Social Security and when you both retire comes down to your personal situation. You don’t want to retire before 62 just because your friend or family member retires before 62. Even if they seem to have a similar desired retirement lifestyle and similar job, they haven’t saved in the exact same manner as you, likely have a different health situation, or maybe have different thoughts on legacy planning.

Putting It All Together in Your Financial Plan

All the various retirement considerations can be overwhelming. That’s why it’s so critical to have a fluid financial plan to have all those retirement considerations in one place. Keeping track of everything that’s in your financial plan and updating it accordingly is a lot of work. But the whole point of retirement is that you’re not having to work anymore and getting to do the things you love, right? That’s why you also need to be working with a team of professionals that’s working for you!  We want to make sure all your retirement considerations are accounted for.

Retirement Planning Is a Team Effort

So, if you’re considering retirement, start a conversation with one of our CFP® Professionals to assess your situation. You can schedule a 20-minute “ask anything” session or a complimentary consultation with one of our CFP® Professionals by clicking here. We can meet with you in person, virtually, or by phone.

If you don’t feel like you’re ready to discuss retiring before 62 with a CFP® Professional, we have something else for you that can help you. You can start building your own financial plan with our industry-leading financial planning tool. It’s the same tool that our CFP® Professionals use, and you can use it from the comfort of your own home. Click the “Start Planning” button below to begin building your very own goals-based plan.

Retiring Before 62


And, as always, if you have any questions as you’re using our tool, let us know. We’ll walk through your questions at your pace and can screen share with you while using our tool. We look forward to hearing from you soon to discuss if retiring before 62 could be in the cards for you.

Retirement Considerations: Retiring Before 62 or 65 | Watch Guide

00:00 – Introduction
01:17 – Retiring Before 62
03:50 – Social Security & Cash Flow
06:06 – Social Security & Taxes
10:00 – Hi/Low: Oldest and Youngest
12:59 – Retiring Before 65: Health Care
14:55 – Why Roth Matters for Health Care Before Medicare
17:06 – Tax Bracket Management Is Critical
20:59 – What We Learned Today

Resources Mentioned in the Episode


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Investment advisory services offered through Modern Wealth Management, LLC, an SEC Registered Investment Adviser.

The views expressed represent the opinion of Modern Wealth Management an SEC Registered Investment Adviser. Information provided is for illustrative purposes only and does not constitute investment, tax, or legal advice. Modern Wealth Management does not accept any liability for the use of the information discussed. Consult with a qualified financial, legal, or tax professional prior to taking any action.