Your Social Security Benefits

What If You Want to Receive Social Security Retirement Benefits Early?

The earliest you can start receiving benefits is at age 62. However, there will be a reduction in the monthly benefit. Why? The government figures that you'll live to receive more payments than the person who starts collecting at full retirement age. So every month you receive a little less.

Today, you can expect to receive 75% of your full benefit if you retire at age 62, assuming you were born between 1943 and 1954; your non-working spouse's benefit would also be reduced—to 35% of your full benefit.

IMPORTANT NOTE: You can start receiving benefits even if you continue working, but your wages may reduce your monthly benefit (see the section How Much Can You Earn Without Reducing Your Benefits?).

Look at the table to see how early retirement may affect your Social Security Retirement Benefits.

Reduction Percentage of Social Security Benefits at Early Retirement

Here's what the reduction would be in subsequent years.

• Age 63: 23.3 percent
• Age 64: 17.8 percent
• Age 65: 11.1 percent
• Age 66: 4.4 percent

For people born in 1960 or later, the full retirement age will be 67 and the reduction for claiming early will be as follows:
• Age 62: 30 percent
• Age 63: 25 percent
• Age 64: 20 percent
• Age 65: 13.3 percent
• Age 66: 6.7 percent
Keep in mind

• The figures above represent the reduction if you start benefits as soon as possible upon reaching the noted age. The benefit decrease is calculated based on months, not years, and each month that you wait beyond your birthday lessens the reduction.

• If you claim benefits early but continue working, your monthly payment could be cut further, depending on your income. However, that reduction is not permanent.

What If You Decide to Take Early Retirement from Your Job?

Some companies let you retire with pension benefits as early as age 55, or perhaps even earlier. You still have to wait until you're age 62 to receive Social Security retirement benefits.

IMPORTANT NOTE: Retiring early could mean even lower monthly Social Security checks. Remember, your monthly amount is based on your average adjusted earnings over your lifetime. As long as you continue to work, you improve the chances of increasing those earnings and the resulting monthly benefit amount.

Does It Make Sense to Collect Early?

When you start collecting your checks will depend on your personal and financial needs:

If you elect to begin receiving benefits at age 62, your benefits will be reduced by at least 20% (for those born after 1937, your benefit will be reduced by as much as 30%). But you will receive an additional 36 checks or more, depending on your full retirement age. If you definitely need the income, take it. Even if you don't need the income, you could invest the money and draw an income from it at a later date.

If you're not in good health and time is not on your side, you'll probably want to collect benefits early. If, on the other hand, you have every reason to believe that you'll live to surpass your life expectancy, and you don't need the income, you may be better off waiting to full retirement age to begin collecting your payments. If you want a rule of thumb, use age 77 as the crossover (break-even) point to compare total income starting at age 62 or full retirement age. If you live past age 77, your cumulative total income starting at full retirement age will generally be higher.

You can earn all you want at full retirement age or later and your Social Security benefits will not be reduced. Prior to full retirement age, income you earn may substantially reduce or eliminate your monthly benefit. In this case, it never pays to start your benefits early (see the section How Much Can You Earn Without Reducing Your Benefits?).

Your spouse's benefit will also be reduced if it is based on your benefit. A spouse eligible for their own retirement benefit is entitled to the higher of his or her own benefit or what he or she could receive as a non-working spouse, but not both. Talk with your spouse before making a decision.

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