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How Does Early Retirement Affect Social Security? 

Retirement Planning
Married couple discussing how early retirement affects social security

Key Takeaways

  • Early retirement leads to reduced Social Security benefits from more years of payments.
  • Spouses can also be impacted, as their benefits are based on the worker's payment amount.
  • Health, life expectancy and gender should factor into the early retirement decision.
  • Delaying benefits until full retirement age or later increases monthly Social Security payments.
  • Continuing to work while taking benefits early can further shrink monthly payments.

The full retirement age for Social Security is between 65 and 67, depending on the year you were born. However, you're not required to wait that long to start receiving payments. Workers are able to enroll as early as age 62, which can be a tempting option for those who plan on leaving the workforce sooner than later.

But understanding the impact of early retirement on Social Security benefits is important. Your monthly benefit will be smaller as a result of retiring early, so this move may not be the right move for everyone. Here's what to consider.

How Social Security Payments Are Calculated

To understand the impact of claiming benefits early, it helps to understand how the Social Security Administration (SSA) calculates those payments in the first place.1 The program tracks your earnings for each year you worked and "indexes" them to account for inflation. It takes the indexed wages for the 35 years when you earned the most and, after applying a mathematical formula, calculates your monthly Social Security benefit. This is your "primary insurance amount," which represents how much you would receive if you waited until your full retirement age.

All that may sound complicated, but figuring out roughly what you'll make at your full retirement is easier than you might think. Workers who are 18 years of age or older can create an account on the Social Security website and review their statement, which contains an estimated benefit amount.2 That figure may change quite a bit for younger workers who have yet to reach their peak earning years, but could be more accurate for those nearing retirement.

How Does Early Retirement Affect Social Security?

When you retire early, Social Security reduces your monthly benefit to account for the fact that you're receiving a greater number of payments than those who hold off until their full retirement age.3 You can actually defer benefits up to age 70, which would increase your monthly payment. The amount of the reduction depends on how long before your full retirement age you start collecting benefits.4

The impact of early retirement on Social Security benefits is even more significant for spouses, who are eligible to receive up to half of the worker's primary insurance amount.5

Factors to Consider Before Taking Social Security Early

If you're thinking about tapping into Social Security early, there are several important considerations to keep in mind.6

Your Actual Retirement Date

Some recipients choose to collect Social Security while continuing to work. But if your income from a job surpasses the program's limit and you decide to collect benefits early, your benefit amount will shrink even further. Therefore, those who still plan on working may have an incentive to wait until their full retirement age before signing up.

If you're younger than the full retirement age for the entire year, for example, you would see your benefit reduced by $1 for every $2 you earn above the yearly cap. In 2023, that limit is $21,240.7 Beginning in the month you reach full retirement age, employment income no longer affects your benefit.

Your Health

The longer you live, the greater your incentive may be to wait and collect your full Social Security benefit at your full retirement age. Collecting your benefit early could reduce your monthly amount and waiting to collect your benefit until after your full retirement age could increase your monthly amount.8 For every year you wait, your retirement benefits increase by a certain percentage until you reach age 70.

While you won't know how many years are ahead of you, you might consider taking stock of your overall health and family longevity when making your decision. Maintaining regular physicals and check-ups with your doctor can help you develop a sense of how healthfully you're aging and what you can do to improve.

Your Gender

Another factor to consider is that women tend to have longer life spans than men. Among American adults who reach age 65, females live, on average, about 5-10 years longer than males.9 So women, in particular, may want to wait until their full retirement age in order to collect their full monthly benefit. As mentioned above, delaying Social Security benefits until after your full retirement age can increase your benefit.

There are a number of ways that early retirement can affect Social Security. Consider this information as you decide what's right for you, and if you need more information, consider speaking with a financial professional.


  1. Your Retirement Benefit: How It’s Figured. https://www.ssa.gov/pubs/EN-05-10070.pdf.
  2. Social Security Administration. https://www.ssa.gov/myaccount/.
  3. If you were born between 1943 and 1954 your full retirement age is 66. https://www.ssa.gov/benefits/retirement/planner/1943-delay.html.
  4. Starting Your Retirement Benefits Early. https://www.ssa.gov/benefits/retirement/planner/agereduction.html.
  5. Benefits for Spouses. https://www.ssa.gov/oact/quickcalc/spouse.html.
  6. What Important Things to Consider When Planning for Retirement. https://www.ssa.gov/benefits/retirement/planner/otherthings.html.
  7. Receiving Benefits While Working. https://www.ssa.gov/benefits/retirement/planner/whileworking.html.
  8. Delayed Retirement Credits. https://www.ssa.gov/benefits/retirement/planner/delayret.html.
  9. Why do women outlive men? https://www.sharp.com/health-news/why-do-women-outlive-men.

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Information provided is general and educational in nature, and all products or services discussed may not be provided by Western & Southern Financial Group or its member companies (“the Company”). The information is not intended to be, and should not be construed as, legal or tax advice. The Company does not provide legal or tax advice. Laws of a specific state or laws relevant to a particular situation may affect the applicability, accuracy, or completeness of this information. Federal and state laws and regulations are complex and are subject to change. The Company makes no warranties with regard to the information or results obtained by its use. The Company disclaims any liability arising out of your use of, or reliance on, the information. Consult an attorney or tax advisor regarding your specific legal or tax situation.