Benefits Planner: Retirement | Retirement Age and Benefit Reduction (2024)

You can start receiving your Social Security retirement benefits as early as age 62. However, you are entitled to full benefits when you reach your full retirement age. If you delay taking your benefits from your full retirement age up to age 70, your benefit amount will increase.

If you start receiving benefits early, your benefits are reduced a small percent for each month before your full retirement age.

To find out how much your benefit will be reduced if you begin receiving benefits from age 62 up to your full retirement age, use the chart below and select your year of birth. This example is based on an estimated monthly benefit of $1000 at full retirement age.

Full Retirement and Age 62 Benefit By Year Of Birth

Year of Birth 1. Full (normal) Retirement Age Months between age 62 and full retirement age 2. At Age 62 3.
A $1000 retirement benefit would be reduced to The retirement benefit is reduced by 4. A $500 spouse's benefit would be reduced to The spouse's benefit is reduced by 5.
1943-1954 66 48 $750 25.00% $350 30.00%
1955 66 and 2 months 50 $741 25.83% $345 30.83%
1956 66 and 4 months 52 $733 26.67% $341 31.67%
1957 66 and 6 months 54 $725 27.50% $337 32.50%
1958 66 and 8 months 56 $716 28.33% $333 33.33%
1959 66 and 10 months 58 $708 29.17% $329 34.17%
1960 and later 67 60 $700 30.00% $325 35.00%
  1. If you were born on January 1st, you should refer to the previous year.
  2. If you were born on the 1st of the month, we figure your benefit (and your full retirement age) as if your birthday was in the previous month. If you were born on January 1st, we figure your benefit (and your full retirement age) as if your birthday was in December of the previous year.
  3. You must be at least 62 for the entire month to receive benefits.
  4. Percentages are approximate due to rounding.
  5. The maximum benefit for the spouse is 50 percent of the benefit the worker would receive at full retirement age. The percent reduction for the spouse should be applied after the automatic 50 percent reduction. Percentages are approximate due to rounding.

Before You Make Your Decision

There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person's situation is different. It is important to remember:

  • If you delay your benefits until after full retirement age, you will be eligible for delayed retirement credits that would increase your monthly benefit.
  • That there are other things to consider when making the decision about when to begin receiving your retirement benefits.

If you decide to delay your benefits until after age 65, you should still apply for Medicare benefits within three months of your 65th birthday. If you wait longer, your Medicare medical insurance (Part B) and prescription drug coverage (Part D) may cost you more money.

Benefits Planner: Retirement | Retirement Age and Benefit Reduction (2024)

FAQs

What is the benefit reduction for early retirement? ›

The overall difference can be substantial. Claiming at 62, for instance, means you'll receive 30% less than your benefit at full retirement age, assuming that is 67. Waiting until 70 means you'll get 24% more in Social Security, because of delayed retirement credits, than if you'd claimed at full retirement age.

What is the earliest age at which reduced Social Security retirement benefits are payable? ›

Early retirement

You can receive Social Security retirement benefits as early as age 62. However, we'll reduce your benefit if you start receiving benefits before your full retirement age. For example, if you turn age 62 in 2024, your benefit would be about 30% lower than it would be at your full retirement age of 67.

What is reduced retirement benefits? ›

If a worker begins receiving benefits before his/her normal (or full) retirement age, the worker will receive a reduced benefit. A worker can choose to retire as early as age 62, but doing so may result in a reduction of as much as 30 percent.

How much money do you lose if you retire at 65 instead of 67? ›

The 1983 overhaul of Social Security gradually raised the age to 67, which it reached in 2022 for those born in 1960 or later — effectively cutting benefits by 13 percent as compared to benefits if the retirement age had remained at 65.

What is the $1000 a month rule for retirement? ›

Understanding the $1,000-a-Month Rule: The $1,000-a-month rule is a simplified formula designed to help individuals calculate the amount they need to save for retirement. According to this rule, one should aim to save $240,000 for every $1,000 of monthly income they anticipate requiring during retirement.

Can you retire at 60 with reduced benefits? ›

Under the Reduced Benefit Election (formerly the Limited-Term Reduction Program), you can receive one-half of the monthly benefit amount calculated as if you were age 60. The reduced benefit will continue for the same number of months after age 60 that you received benefits before age 60.

At what age can I collect 100% of my Social Security? ›

If you start receiving benefits at age 66 you get 100 percent of your monthly benefit. If you delay receiving retirement benefits until after your full retirement age, your monthly benefit continues to increase. The chart below explains how delayed retirement affects your benefit.

Why retiring at 62 is a good idea? ›

Deadlines, long hours, and workplace conflicts can all contribute to physical and mental stress. The earlier you retire, the better it may be for your overall health. Research suggests that retiring earlier in life can help you stay healthier for longer.

At what age is Social Security no longer taxed? ›

Social Security can potentially be subject to tax regardless of your age. While you may have heard at some point that Social Security is no longer taxable after 70 or some other age, this isn't the case. In reality, Social Security is taxed at any age if your income exceeds a certain level.

What does reduced benefits mean for Social Security? ›

If you are younger than full retirement age and earn more than the yearly earnings limit, we may reduce your benefit amount. If you are under full retirement age for the entire year, we deduct $1 from your benefit payments for every $2 you earn above the annual limit.

What is the reduced retired pay age? ›

REDUCED RETIRED PAY AGE

The National Defense Authorization Act for 2008 reduced the retirement age for Reserve Component airmen from 60 to a lesser age, not to be any earlier than age 50. The reduced retired pay age is calculated with qualifying service days on or after Jan. 29, 2008.

How do I get the $16728 Social Security bonus? ›

Have you heard about the Social Security $16,728 yearly bonus? There's really no “bonus” that retirees can collect. The Social Security Administration (SSA) uses a specific formula based on your lifetime earnings to determine your benefit amount.

What does Suze Orman say about taking Social Security at 62? ›

As we have discussed, you are eligible to start claiming your benefit when you turn 62. But the benefit you receive at 62 will be permanently lower than if you wait. Every month past age 62 you don't claim your benefit entitles you to a slightly larger payout when you do start collecting your benefit.

What is the #1 reason to take Social Security at 62? ›

When it might make sense to take Social Security at 62. You need the money now. You have health issues that may shorten your life expectancy, or you don't expect to live past your break-even point. You're receiving early retirement from an employer and the benefits end at age 62.

What does Dave Ramsey say about taking Social Security at 62? ›

Start Collecting Early

He claims that doing so will give you a greater return than you would get by waiting until a later age to apply for Social Security, which means you get a bigger monthly check. “It usually makes sense to take it early if you're going to … invest every bit of it,” Ramsey said in a 2019 podcast.

What is a downside to offering early retirement packages? ›

You typically must work until your company's normal retirement age (usually 65) to receive the maximum benefits. This means that you may receive smaller benefits if you accept an offer to retire early.

What is the actuarial reduction for retirement? ›

ARER is when you take your pension benefits before your Normal Pension Age (NPA). This is also known as Voluntary Early Retirement. As your benefits are being paid early and for longer, the amounts are reduced. The amount of the reduction depends on your age at the payable date of the benefits.

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