Choosing when to claim your Social Security benefits can have a major impact on your retirement income. While you can start collecting as early as age 62, doing so comes with a permanent reduction in benefits. So, how much are you giving up by claiming early? Let’s break it down.
Early Claiming
If you were born in 1960 or later, your full retirement age (FRA) for Social Security is 67. You can claim benefits before that, but each month you claim early reduces the amount you’ll receive. According to the Social Security Administration (SSA), over 63% of retirees start claiming benefits before they reach their FRA, accepting lower monthly payments.
For those who claim early, the average monthly benefit is $1,668. This is significantly lower than the average for all retirees, which is $1,905, and even lower than the $2,310 received by those who wait until full retirement age. The difference between claiming early and waiting can be as much as 39%.
Benefits
Here’s a look at how the numbers compare for different types of claimants:
| Category | Average Monthly Benefit |
|---|---|
| All retired workers | $1,905.31 |
| Reduction for early retirement | $1,667.57 |
| No reduction for early retirement | $2,310.22 |
By claiming early, retirees receive just over $20,000 per year, whereas those who wait until full retirement age enjoy an annual income of $27,720—a difference of nearly $7,000 per year.
Amount
The earlier you claim Social Security, the more your benefits will be reduced. For those with a full retirement age of 67, here’s how the reduction percentages work if you claim early:
| Age When You Start | Reduction Percentage |
|---|---|
| 62 | 30% |
| 63 | 25% |
| 64 | 20% |
| 65 | 13.33% |
| 66 | 6.67% |
These reductions are significant. For example, if you claim at age 62, you’ll see a 30% cut in your monthly benefit compared to waiting until full retirement age.
How to Check
If you want to know exactly how much you’ll receive, it’s easy to get an estimate based on your personal work history. Simply create an account at SSA.gov to access your Social Security statement. This document provides estimates for your benefit at full retirement age, as well as for earlier and later claiming options.
It’s important to remember that reductions are prorated monthly. If you claim a few months before a milestone age, your reduction will be slightly smaller than the full percentage for the nearest year. For example, claiming three years and two months early would result in a 20.83% reduction instead of 25%.
Claim
Deciding whether to claim Social Security early or wait until full retirement age depends on your situation. Some people may need to retire early due to health issues or job loss, making it necessary to claim early despite the lower monthly payments. The Social Security system is designed to pay out roughly the same total amount over your lifetime, whether you claim early or wait.
In other words, if you claim early, you’ll receive smaller checks but over a longer period of time. If you wait, your monthly payments will be larger, but you’ll collect them for fewer years. However, if you can afford to wait, delaying benefits can boost your retirement income by as much as 39%.
Ultimately, the decision to claim early or wait depends on your health, financial needs, and life expectancy. While claiming early provides immediate income, waiting offers a larger monthly benefit that can provide more financial security later in life.
FAQs
How much do early Social Security claimers receive?
Those who claim early average $1,668 per month.
What is the full retirement age for most people?
For most people, full retirement age is 67.
How much will my benefit be reduced if I claim at 62?
Claiming at 62 results in a 30% reduction in your benefits.
How can I estimate my Social Security benefit?
Log into SSA.gov to see your personalized Social Security statement.
Are Social Security reductions prorated monthly?
Yes, reductions are prorated if you claim between milestone ages.
