As retirement draws closer, many Americans consider the possibility of claiming Social Security benefits early. While it might seem like a great way to start enjoying retirement sooner, doing so can significantly reduce your monthly benefits — by as much as 30%. This reduction is not temporary. It’s permanent, affecting your lifetime retirement income.
This article explains why early retirement reduces benefits, how much you could lose, and how to make informed decisions when planning your Social Security strategy.
What Is Full Retirement Age (FRA)?
Your Full Retirement Age (FRA) is the age at which you’re eligible to receive 100% of your Social Security retirement benefit. The FRA depends on your birth year:
| Year of Birth | Full Retirement Age |
|---|---|
| 1943–1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 or later | 67 |
If you claim benefits before this age, you’ll receive less each month for the rest of your life.
How Much Do You Lose by Claiming Early?
You can begin claiming Social Security at age 62, but doing so will trigger a monthly reduction based on how early you claim. For someone whose FRA is 67, retiring at 62 results in a 30% permanent reduction in monthly benefits.
Here’s a table showing how benefits are reduced if you claim early:
| FRA Monthly Benefit | Benefit at 62 | Reduction |
|---|---|---|
| $1,000 | $700 | 30% |
| $1,500 | $1,050 | 30% |
| $2,000 | $1,400 | 30% |
This reduction is calculated as 5/9 of 1% per month for the first 36 months and 5/12 of 1% for each additional month you claim early.
Delaying Benefits Increases Monthly Payments
Just as claiming early reduces your benefit, delaying your claim past your FRA increases it. For every year you wait beyond your FRA, your monthly benefit increases by about 8% until age 70.
Here’s how delaying can boost your income:
| FRA Monthly Benefit | Benefit at Age 70 | Increase |
|---|---|---|
| $1,000 | $1,240 | +24% |
| $1,500 | $1,860 | +24% |
| $2,000 | $2,480 | +24% |
If you can afford to delay benefits, doing so can significantly raise your total retirement income.
Earnings Limits Before FRA
If you continue working while receiving early benefits, there are earnings limits that could further reduce your benefits. For 2025, the limits are:
- $23,400 per year if you are under FRA
- $62,160 in the year you reach FRA (only earnings before your birthday month are counted)
If you earn more than these limits:
- Your benefits are reduced by $1 for every $2 earned over the limit (before FRA)
- $1 is deducted for every $3 earned over the limit in the year you reach FRA
Once you reach FRA, you can earn any amount without impacting your benefits.
Should You Retire Early? Key Considerations
Before deciding to retire at 62, evaluate these key factors:
- Health: If you expect a shorter lifespan or need income immediately, claiming early might be reasonable.
- Financial Need: If you don’t have other retirement savings or income, early benefits might be necessary.
- Spousal Benefits: Early claims can impact benefits your spouse or survivors may receive.
- Long-Term Income: Delaying benefits results in a larger monthly check for life.
Balancing these considerations helps ensure you make the right decision based on your circumstances.
Claiming Social Security early can cost you up to 30% of your monthly benefit — every month for the rest of your life. While it may be tempting to retire at 62, delaying your claim until FRA or later can significantly boost your long-term retirement income.
Weigh your health, finances, and life expectancy carefully before deciding. For those who can afford to wait, patience pays.
FAQs
Can I cancel my early Social Security claim?
Yes, but only within 12 months of starting. You must repay all benefits received, and you’re allowed to do this only once.
Will my monthly benefit increase once I reach FRA if I claimed early?
No. If you claim early, the reduction is permanent. Your monthly amount will not increase once you hit your FRA.
Can I switch from early retirement benefits to spousal benefits later?
In some cases, yes. But spousal benefits are also reduced if claimed early, and your timing affects which benefit gives the higher payout.