The Hidden Costs of Claiming Social Security at 62

A person who claims Social Security at age 62 and continues to work may find their near-term income reduced. This occurs because of the Social Security earnings test. In 2026, the cap is $24,480. If a person's income exceeds that threshold, Social Security withholds $1 in benefits for every $2 earned over the limit. This is a strategy often advocated by Dave Ramsey, who suggests that claiming early and investing the checks up front allows investments to produce more total wealth over time. However, the earnings test creates a complication for those who not fully retired at 62.