Suze Orman Warns Retirees About Claiming Benefits at 62

If you really want to retire at 62 and collect Social Security, go for it.

You’ve worked hard enough.  You’ve paid your dues.  Now it’s your time to relax and collect what’s rightfully yours, right?

According to finance expert Suze Orman, claiming benefits early could be a costly mistake. Instead, if you’re in good health and financially stable, wait to retire and collect until you reach your Full Retirement Age (FRA), which is typically 66 or 67, depending on your birth year.

You see, when you claim at 62, you’re actually giving up 30% of your benefits. Claim benefits at 62, and you potentially forfeit 30% of your potential earnings. Claim benefits at FRA, and you receive 100% of your benefits. Better still, delay your benefits until you turn 70, and you can increase your payments by up to 8% per year.

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For example, if your full retirement benefit at 67 is $1,000 per month, retiring at 62 will give you $700. At 70, you could receive $1,240 to $1,320. That higher payment continues for life. Over a 25- or 30-year retirement, the difference can total tens of thousands of dollars.

Why Waiting Often Makes Sense 

Americans are living longer than ever. A smaller monthly check may not feel significant at first — but over decades, it can meaningfully affect your financial security. In fact, by delaying Social Security, you can increase potential income, provide greater protection against outliving your savings, and offer greater financial flexibility over the long haul.

Knowing that, and you still want to retire at 62, work with your financial advisor. Make sure you:

• Have little to no high-interest debt
• Have sufficient retirement savings to last 30+ years
• Can cover healthcare costs until Medicare begins at 65
• Have factored in inflation and taxes
• Have budgeted for lifestyle expenses like travel or hobbies

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Unfortunately, many people underestimate how much they’ll need in retirement and overestimate how prepared they are. It’s why you’ll also want a realistic retirement budget that accounts for potential vacations, travel, hobbies, home costs, helping family members, emergency expenses (which pop up out of the blue), etc.

Running the numbers carefully can prevent financial stress later on.

In short, Suze Orman’s advice isn’t that retiring at 62 is impossible — it’s that claiming Social Security too early could be costly in the long run.

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You’ll also want a Plan B in place

Consider having a Plan B when it comes to collecting Social Security benefits.

According to CBS News, Social Security’s trust fund could run out a year earlier than expected, according to a new projection from the Congressional Budget Office (CBO).

“The CBO forecasts that the Old-Age and Survivors Insurance Trust Fund — one of the two funds Social Security taps to disburse benefits — will be exhausted in 2032. The agency, which provides budgetary analysis to Congress, estimated last year that the trust fund would run dry in 2033,” reports CBS News.

Part of the reason for the issue is the CBO’s forecast of higher inflation, which could affect Social Security’s cost-of-living adjustment (COLA). That’s in addition to reduced individual income taxes and payroll taxes. So, you may want to have a Plan B, which means you want to build wealth on your own while lowering what you expect the government to do.

So, you’ll want to account for this as well.