Imagine reaching your 62nd birthday with enough money to retire, but knowing another five years at work could leave you considerably better off financially. Do you take the money and run while you’re healthy enough to enjoy retirement, or keep collecting paychecks until 67 and potentially buy yourself more financial security later? For people turning 62 in 2026, the choice lines up neatly with Social Security because 67 is their full retirement age. The financial argument for retiring at 67 vs. 62 can be powerful, but retirement isn’t simply a contest to accumulate the biggest possible account balance. Before giving five more years to your job, it helps to understand exactly what those years could buy—and what they could cost.
Five More Paychecks Can Change the Math Dramatically
The most obvious advantage of working until 67 is that you’re earning money instead of withdrawing it from retirement savings. Suppose someone earns $70,000 annually and would otherwise need to pull $45,000 per year from investments to support retirement; five additional working years could potentially avoid $225,000 of withdrawals before even considering investment growth. That doesn’t mean the person automatically becomes $225,000 richer because taxes, commuting, retirement contributions, and other expenses change the calculation. Still, avoiding early withdrawals gives invested money additional time to remain in the market, while continued earnings can fund everyday expenses. When comparing retiring at 67 vs. 62, look at both sides of the equation: money you’re still earning and retirement money you aren’t yet spending.
Your Social Security Check Could Be Significantly Different
Age 62 is the earliest most workers can claim Social Security retirement benefits, but starting early permanently reduces the monthly amount compared with waiting until full retirement age. The Social Security Administration explains that benefits are reduced for every month they’re received before full retirement age. For someone born in 1960 or later, SSA says claiming at 62 can result in a benefit equal to about 70% of the full retirement amount available at 67. Someone entitled to $2,500 monthly at 67, for example, would receive roughly $1,750 at 62 under that example—a difference of about $750 a month before future cost-of-living adjustments. That doesn’t automatically make claiming at 62 a mistake because the early retiree also receives five years of checks that the person waiting until 67 doesn’t collect.
Your Final Working Years Can Improve the Benefit Calculation Too
Waiting to claim isn’t the only way continued employment can affect Social Security. SSA calculates retirement benefits using your highest 35 years of earnings, and the agency explains that years with no earnings can reduce benefits when someone has fewer than 35 years of work history. Even someone with a complete 35-year record could benefit if another high-earning year replaces a lower-earning year from decades earlier. That’s particularly relevant for workers who spent time outside the workforce caring for children, dealing with unemployment or earning much less early in their careers. In other words, working from 62 to 67 can potentially affect both when you claim Social Security and the earnings record used to calculate it.
Ages 60 Through 63 Offer an Extra Savings Opportunity
Workers approaching retirement have unusually large opportunities to put money into workplace retirement accounts in 2026. The IRS says the basic employee contribution limit for 401(k), 403(b), and most 457 plans is $24,500 in 2026, while workers ages 60 through 63 may be able to make a special catch-up contribution of another $11,250 if their plan permits it. That creates a potential employee contribution limit of $35,750 for someone eligible for the enhanced catch-up, before considering employer contributions. Few people can afford to contribute the maximum, but even putting an additional $10,000 a year away from ages 62 through 66 would mean another $50,000 contributed before investment returns. This is one reason retiring at 67 vs. 62 can create a much larger financial difference than simply five additional years of salary.
Health Insurance Can Be the Awkward Part of Retiring at 62
Social Security may start at 62, but Medicare generally doesn’t start until 65. That leaves someone retiring at 62 needing approximately three years of health coverage from another source, such as a spouse’s employer plan, retiree insurance or an Affordable Care Act Marketplace policy. Premiums aren’t the only consideration because deductibles, prescription costs and provider networks can make two insurance options with similar monthly prices financially very different. By contrast, someone working past 65 may be able to remain on qualifying employer coverage, although Medicare enrollment rules still deserve careful attention. Medicare specifically advises people to understand how employer or retiree coverage works with Medicare, so they don’t accidentally create coverage gaps or enrollment penalties.
Leaving at 62 Buys Something Money Can’t Replace
The financial case for another five years is easy to put into a spreadsheet, but those years aren’t free. Someone retiring at 62 receives roughly 1,825 additional days without a full-time job compared with someone retiring at 67. Those could be years spent traveling, caring for grandchildren, pursuing hobbies, volunteering, starting a small business or simply enjoying ordinary Tuesday mornings without an alarm clock. Health also isn’t guaranteed to remain the same between 62 and 67, which makes maximizing lifetime wealth different from maximizing the number of healthy retirement years. If you’ve already accumulated enough to comfortably support the retirement you want, continuing to work solely to make an already adequate portfolio larger deserves some serious thought.
But Retiring Early Can Create a Longer Withdrawal Period
Leaving work at 62 also means your savings may need to support you for a very long time. A person who lives to 92 would face a 30-year retirement after leaving at 62 compared with 25 years after leaving at 67. Those first five years can be especially important because large withdrawals during a major market decline early in retirement can reduce how much money remains available to recover later. Delaying withdrawals doesn’t eliminate investment risk, inflation, or longevity risk, but it shortens the number of years the portfolio must support everyday living expenses. When weighing retiring at 67 vs. 62, test your budget against a long retirement rather than assuming average life expectancy will describe your personal experience.
You Don’t Necessarily Have to Choose Between Work and Retirement
The decision isn’t always as binary as “quit at 62” or “work full time until 67.” Someone might leave a demanding career at 62 and work part time, consult seasonally, or take a lower-stress position that covers some expenses without consuming the entire week. Social Security also allows people to work while receiving retirement benefits, although SSA notes that benefits can be temporarily withheld when earnings exceed the annual limit before full retirement age. Another possibility is leaving work at 62 but delaying Social Security while living temporarily from savings, pensions or part-time income. Separating the date you stop working from the date you claim Social Security creates far more retirement strategies than the traditional all-or-nothing approach suggests.
Run the Five-Year Experiment Before Giving Notice
Before choosing retiring at 67 vs. 62, try living for several months on the amount your retirement budget says you’ll have available. Send the difference between your current take-home pay and that retirement budget into savings, which simultaneously tests your plan and builds a larger cash cushion. Then price your actual health insurance, estimate taxes, pull your Social Security estimates, and list expenses that will disappear or appear after work ends. If the budget feels comfortable and your savings can withstand a long retirement, leaving at 62 may be financially realistic; if the numbers feel tight, five more working years could dramatically improve your margin for error.
If you had enough money to retire at 62 but knew working until 67 would leave you substantially wealthier, which five years would you choose?
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