As of 2015, workers can retire at age 62 if they take reduced monthly Social Security benefits, according to the Social Security Administration. They can offset receiving less in Social Security by paying off their mortgages and maximizing other retirement benefits such as 401(k) accounts and health savings accounts, explains Forbes.
Although retirees can begin receiving Social Security benefits at age 62 and over, they do not receive all their benefits until they reach full retirement age, according to the Social Security Administration. For those born in 1937 or earlier, the full retirement age is 65, and for those born from 1943 to 1954, it is 66. For those born after 1959, it is 67, and with other years, the threshold is measured in increments between. For instance, someone born in 1960 or later who receives $1,000 monthly at the full retirement age of 67 would receive 30 percent less, or $700, when retiring at the age of 62.
To offset smaller monthly Social Security payments, those planning to retire at age 62 should get a 15-year mortgage or make extra principle payments so that they pay off their homes by the time they retire, advises Forbes. Retirees who are not homeowners should earmark investment funds for rent payments. Additionally, early retirees should set aside the maximum allowed amounts into their 401(k)s or other employer retirement accounts. If employers offer health savings accounts, early retirees should contribute to them as well because they offer an opportunity to set aside tax-free funds for medical expenses during retirement.