The full retirement age for Social Security is between 65 and 67, depending on the year you were born. However, you do not have to wait that long to start receiving payments. Workers can enroll as early as age 62, which can be appealing for those who plan to leave the workforce sooner.
However, it is important to understand how early retirement affects Social Security benefits. Your monthly benefit will be lower if you retire early, so this decision may not work for everyone. Here is what to consider.
How Social Security Payments Are Calculated
To understand the impact of claiming benefits early, it helps to know how the Social Security Administration (SSA) calculates payments.1 The program tracks your earnings for each year you worked and adjusts them for inflation. It then looks at the 35 years when you earned the most and uses a formula to calculate your monthly benefit. This is called your primary insurance amount, which is what you would receive if you waited until full retirement age.
This process may sound complex, but estimating your benefit is easier than it seems. Workers age 18 and older can create an account on the Social Security website and review their statement, which includes an estimated benefit amount.2 This estimate may change for younger workers who have not reached their highest earning years, but it can be more accurate for those closer to retirement.
How Does Early Retirement Affect Social Security?
If you retire early, Social Security reduces your monthly benefit because you will receive payments over a longer period of time.3 You can delay benefits until age 70, which increases your monthly payment. The amount of the reduction depends on how early you begin collecting benefits.4
Early retirement can also affect spousal benefits. A spouse may receive up to half of the worker’s primary insurance amount, so a reduced benefit can also lower the spouse’s payment.5
Factors to Consider Before Taking Social Security Early
If you are thinking about claiming Social Security early, there are several factors to review.6
Your Actual Retirement Date
Some people choose to collect Social Security while still working. However, if your earnings exceed the program’s limit and you claim benefits early, your benefit may be reduced even more. Because of this, those who plan to keep working may want to wait until full retirement age before enrolling.
If you are younger than full retirement age for the entire year, your benefit is reduced by $1 for every $2 you earn above the yearly limit. In 2026, that limit is $24,480.7 Once you reach full retirement age, your earnings no longer reduce your benefit.
Your Health
The longer you live, the more you may benefit from waiting to claim Social Security. Taking benefits early lowers your monthly amount, while delaying benefits can increase it.8 Each year you wait increases your benefit until age 70.
Although you cannot predict your lifespan, you can think about your current health and family history when making your decision. Regular checkups with your doctor can also give you a better sense of your overall health.
Your Gender
Women tend to live longer than men. Among adults who reach age 65, women live about 5.3 years longer on average.9 Because of this, women may benefit from waiting until full retirement age or later to collect a higher monthly benefit.
Final Thoughts
Early retirement can affect Social Security in several ways. Review your options carefully as you decide what fits your situation. If you need more guidance, consider speaking with a financial professional.
Sources
- Your Retirement Benefit: How It’s Figured. https://www.ssa.gov/pubs/EN-05-10070.pdf.
- Social Security Administration. https://www.ssa.gov/myaccount/.
- If you were born between 1943 and 1954 your full retirement age is 66. https://www.ssa.gov/benefits/retirement/planner/1943-delay.html.
- Starting Your Retirement Benefits Early. https://www.ssa.gov/benefits/retirement/planner/agereduction.html.
- Benefits for Spouses. https://www.ssa.gov/oact/quickcalc/spouse.html.
- What Important Things to Consider When Planning for Retirement. https://www.ssa.gov/benefits/retirement/planner/otherthings.html.
- Receiving Benefits While Working. https://www.ssa.gov/benefits/retirement/planner/whileworking.html.
- Delayed Retirement Credits. https://www.ssa.gov/benefits/retirement/planner/delayret.html.
- Do women live longer than men in the US? https://usafacts.org/articles/do-women-live-longer-than-men-in-the-us/.
