Claiming Social Security at 62 Has a Hidden Downside Most Retirees Never See Coming

Many people rely on Social Security when their retirement savings are stretched thin. And the truth is that even if you're coming into retirement with a nice amount of savings, you might still need those monthly benefits to cover rising expenses.

Social Security recipients have a choice as to when to claim retirement benefits. The earliest age to file is 62, and it's easy to see why you may be tempted to start collecting that money as soon as you can.

You may be aware that filing for Social Security benefits at 62 causes your monthly payments to be reduced, but there's actually another repercussion that might really sting in the long run.

What happens when you claim Social Security at 62

The monthly Social Security benefit you're eligible for in retirement is based on your personal wage history. But your filing age also helps determine how much money Social Security pays you each month.

If you file for Social Security before reaching full retirement age (FRA), your monthly benefits will be reduced. And the earlier you claim benefits, the greater the reduction will be.

If you claim Social Security at the earliest possible age of 62, you'll be looking at a 30% reduction in your monthly checks compared to waiting until FRA. The average monthly Social Security benefit as of April 2026 is $2,081. A benefit that size becomes $1,457 if you file for it five years ahead of FRA.

Reduced benefits also mean smaller raises

Social Security benefits are eligible for a cost-of-living adjustment, or COLA, every year. But the smaller your monthly checks are, the less valuable each individual COLA is going to be.

In 2026, for example, Social Security benefits got a 2.8% COLA. For a benefit worth $2,081, a 2.8% COLA translates to an additional $58 per month. But for a benefit worth $1,457, a 2.8% increase means getting an additional $41 per month.

On a one-year basis, that may not seem to be such a drastic difference. With the reduced benefit, you're looking at $17 less per month, or $204 less per year.

But remember, you might end up collecting Social Security benefits for 20 or 30 years. So over time, you could end up missing out on a lot of money as those COLAs come in.

You need inflation protection

The other big issue with claiming Social Security at 62 is that if you get smaller benefits and smaller COLAs, you get less protection against inflation. And that could make it difficult to keep up with your basic costs over time.

You may have other income streams available to you in retirement, like a pension or annuity. But those income sources may not have built-in inflation protection.

Similarly, you might have money in savings you bring into retirement. But your savings are technically not guaranteed to keep up with inflation.

Granted, you can invest your savings in assets that are likely to beat or keep pace with inflation. But if you want an actual guarantee, Social Security may be the only income stream that gives it to you.

When it pays to file for Social Security at 62, and when it doesn't

Claiming Social Security at 62 is not always a bad idea. If you can no longer work at age 62, filing for benefits could make a lot more sense than relying on debt or wiping out your savings to pay for your needs.

Also, if your health is poor and your family history suggests you may not live a long life, then filing for Social Security at 62 could be a smart financial move. Even if doing so shrinks your benefits on a monthly basis, it may not do so on a lifetime basis if you only end up living until your early or mid-70s.

On the other hand, claiming Social Security at 62 could be dangerous if you do expect to live a long life in retirement and you don't have much income outside of those monthly benefits. And even if your health isn't great, if you're married and are the higher earner in your household, an early claim could leave your spouse with smaller survivor benefits. So if that's the case, you may want to consider holding off on FRA if not for your sake, then for your spouse's.

Bottom line

Your Social Security benefits may play a big role in your retirement plan. And you should know that reducing that key income stream could leave you with not just smaller checks each month, but less protection against inflation over time.

Before you file for Social Security, think about your spending needs, life expectancy, and retirement income streams. If you expect those benefits to be your only source of retirement income with built-in inflation protection, then you may want to think twice before filing early and giving yourself even less of a leg up against rising costs.