Many seniors rely heavily on Social Security as an important source of retirement income, so you'd think that most people would have a pretty good sense of how the program works. But new data reveals that Americans are sorely lacking knowledge about one key aspect of Social Security. And if it's knowledge you're missing, you could end up setting yourself up for years of financial distress.

Get all the right information

There are different factors that determine what your Social Security benefit looks like in retirement. These include:

  • Your wage history
  • The number of years you worked
  • The age you file for benefits at

Your Social Security benefits are calculated based on your wages during your 35 highest-paid years on the job. From there, your filing age will determine what monthly benefit you end up with.

A person at a laptop.

Image source: Getty Images.

If you wait until full retirement age (FRA) to file, you'll be eligible for your complete monthly benefit based on your earnings history. But if you file for benefits before FRA (you can sign up as early as age 62), you'll slash your benefits for life in the process.

In fact, if you have an FRA of 67 but decide to move forward with a Social Security filing at age 62, you'll end up with a 30% reduction in benefits. That could lead you to struggle financially once your career wraps up and you stop bringing home a paycheck.

Now based on that, you'd think Americans would have a good sense of what their FRA looks like. But according to a recent survey by the Nationwide Retirement Institute, only 13% of U.S. adults know their correct FRA. That's a clear problem, because without that information, you can't make an informed decision as to when to sign up for benefits.

What does your full retirement age look like?

FRA is not universal. Rather, yours depends on when you were born, as the table shows.

Year of Birth

Full Retirement Age




66 and two months


66 and four months


66 and six months


66 and eight months


66 and 10 months

1960 or later


Data source: Social Security Administration.

While claiming Social Security before FRA will result in a reduced monthly benefit for life, delaying benefits past FRA will have the opposite effect -- it will result in a more generous monthly benefit through your retirement.

Of course, you can't delay your filing indefinitely in exchange for a boosted benefit. Come age 70, your benefit will no longer grow. But you don't necessarily want to rush to file for Social Security at FRA when there's the potential to eke out a higher benefit -- especially if you don't have a lot of retirement savings to fall back on.

Don't be in the dark

Not knowing your FRA could lead to a poor choice when it comes to filing for benefits. But that's not the only crucial piece of information you need before claiming Social Security. It's important to fully understand how the program works, so the sooner you start building that knowledge, the better equipped you'll be to make smart decisions for your retirement.