Q: How much is my Social Security retirement reduced if I start early?
A: This depends on how many months younger you are than full retirement age (FRA), also called normal retirement age. Full retirement age is the age at which a person may first become entitled to full or unreduced retirement benefits. No matter what your FRA is, you may start receiving benefits as early as age 62 or as late as age 70.
Starting retirement when younger than FRA is called early retirement. Starting when older than FRA is called delayed retirement. Social Security retirement amounts are partly based on the number of months that you are younger or older than FRA.
Based on year of birth, full retirement age ranges from age 65 to 67 under current legislation. It is age 66 for birth years 1943 – 1954. The “find your retirement age” section of the SSA Retirement Planner shows the month-by-month percentage of benefit received from age 62 to FRA for any year of birth. Monthly changes are small but they add up over time.
To use these charts, you need to know your estimated benefit amount at full retirement age. For this, use the Retirement Estimator. An estimated amount is also shown on your Social Security Statement, available when you create a my Social Security account.
Using a full retirement age of 66, starting retirement exactly at age 62 results in a monthly benefit reduced to 75 percent of your FRA amount, a permanent 25 percent reduction. Starting with a different month changes this. For example, starting at age 62 plus 4 months results in 76.7 percent of the FRA amount and starting at 62 plus 5 months results in 77.1 percent being received.
By comparison, if born in 1956 your FRA is age 66 and 4 months. Now when starting retirement at age 62, the monthly amount received is reduced to 73.3 percent of the FRA amount. Starting retirement at age 62 plus 4 months results in 75 percent received and starting at 62 plus 5 months results in 75.4 percent of FRA amount being received. This is because you would receive reduced benefits for more months.
As a general rule, early or late retirement will give you about the same total Social Security benefits over your lifetime. If you retire early, the monthly benefit amounts will be smaller to take into account the longer period you will receive them. If you retire late, you will get benefits for a shorter period of time but the monthly amounts will be larger to make up for the months when you did not receive anything.
The following image shows part of the month-by-month reduced benefit percentages for FRA of 66. Actual FRA charts provide this month-by-month, age 62 to FRA, for the different full retirement ages.
