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Things to Know Before You Retire at 62

Should You Retire at 62? Get Answers Before You Decide.


Retirement involves making some irrevocable decisions, such as when to collect Social Security benefits. Before you decide to retire at 62, get informed. Below are several things you'll want to consider.

You Don’t Have to Start Social Security Just Because You Retire

Just because you retire at 62, it does not mean you have to start collecting Social Security at 62. You will get a larger benefit by waiting to collect Social Security until you are older, and there are some unique strategies that married couples can use to get more out of their combined benefits.

Strategies to Maximize Your Benefits

Contrary to popular belief, using your own savings for income first while delaying your Social Security can be more tax-efficient, and net of taxes, it can make your personal money last longer.

Should I Take Social Security at 62?

Many retirees say their biggest fear is running out of money. Social Security provides inflation adjusted income for as long as you live. Married couples who make strategic choices about how and when to collect benefits can receive hundreds of thousands more in benefits over their joint lifetimes than those who collect early with no strategy. You can use a Social Security calculator to see the difference between a good claiming strategy and a poor one.

Best Social Security Calculators

Medicare Kicks In at 65

Medicare benefits don’t start until you turn 65. If you retire at 62 you’ll need to make sure you can afford adequate health insurance coverage until age 65 when Medicare benefits begin.

Medicare Basics

Also keep in mind, Medicare does not cover all health care costs, so many people purchase additional health coverage to supplement their Medicare benefits. Get quotes on your health insurance costs so you can build this expense into your retirement budget.

My Health Insurance is Through My Employer. What do I Do When I Retire?

Consider Consolidating Retirement Accounts

If you have money in IRAs, 401ks or other employer sponsored plans, you’ll want to think about consolidating these investments into one account. Many people believe their money is safer when it is spread out across many different firms. This should not be a factor in the decision. When you use a large well-known financial custodian than there is no reason to hold money in several other places too.

IRA Rollover Frequently Asked Questions

At age 70 ½ tax rules require you to start taking distributions from your retirement accounts, and it is much easier to follow these rules when your retirement accounts have been consolidated.

Required Minimum Distributions, What, When and How Much

Also, keep in mind, even though you don’t have to take money out of your IRA or other retirement account until age 70 ½, for tax reasons, if you retire at 62 it may make sense to start taking withdrawals before you are required to. It will depend on your marginal tax bracket and your other sources of income. You may wish to work with a retirement planner that specializes in helping people decide on the most tax efficient way to use their retirement money.

What Will a Good Retirement Planner Do For Me?

Next: How to Retire at 65

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