Social Security serves as a critical income source for millions of seniors. But if you don't read up on how the program works, you'll risk losing out on money that could be critical during retirement. Here are a few specific rules you must be aware of.

1. Your filing age matters

You're entitled to your full monthly Social Security benefit once you reach full retirement age, or FRA. That age isn't the same for everyone -- it depends on your year of birth, as follows:

Year of Birth

Full Retirement Age




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 or later



That said, the Social Security Administration (SSA) actually gives you an eight-year window to sign up for benefits that begins at age 62 and ends at age 70. (Technically, you can file after 70, but there's no financial reason to wait past then.)

If you file at any year prior to FRA, your benefits will be reduced to the tune of 6.67% a year for the first 36 months you claim them early and 5% a year for each 12-month period thereafter. This means that if your FRA is 67 and you file at 64, you're looking at a 20% reduction in benefits. If your FRA is 67 and you file at 62, that reduction increases to 30%.

Older man resting his head on his locked hands


On the flip side, if you hold off on claiming benefits past FRA, you'll accrue delayed retirement credits that boost your monthly payments by 8%, up until age 70, at which point you can't accumulate any more credits. That's why 70 is considered the latest age to sign up for Social Security.

There's no right or wrong answer as to when you should claim benefits -- much of that will depend on your personal financial circumstances. But what you do need to know is that your filing age will determine how much monthly income you ultimately get from Social Security, so consider your choices carefully before moving forward.

2. You can undo your benefits if you file too early

The problem with filing for Social Security early is locking in a lower monthly benefit for life. But if you realize you filed prematurely and regret it after the fact, there's good news -- the SSA will give you a single do-over in your lifetime, but you have to act quickly.

If you withdraw your benefit application and repay the SSA all of the money you received in benefits within a year, you'll get the option to file again at a later point in time, thereby securing a higher monthly benefit. And while coming up with up to a year's worth of payments is easier said than done, it's worth trying if you're not thrilled with the idea of a lower monthly benefit for life.

3. Boosting your earnings will boost your benefits

Though your filing age will determine how much money you collect from Social Security, those benefits are initially based on how much money you earn during your 35 highest-paid years in the workforce. As such, the higher your income during that time, the more money you stand to collect in retirement.

You can boost your earnings by fighting for raises throughout your career, boosting your job skills to warrant promotions that come with higher pay, or even getting yourself a side job on top of your main one. Not only will those moves help you secure a higher benefit, but they'll also help out financially when you're younger.

The more you know about Social Security, the easier it'll be to make smart decisions when it comes to filing for and managing your benefits. Take the time to educate yourself -- it's a worthwhile investment in your financial security during retirement.