Social Security may end up being your primary income source in retirement. Or, if you have a lot of money in savings, it may end up being a secondary income source, but a significant one nonetheless.

That's why it's important to get as much money out of Social Security as you can -- especially since unlike your savings, which do have the potential to run out on you, Social Security is designed to pay you a monthly benefit for the rest of your life. But if you're in the dark about one key factor, that benefit could end up being a lot smaller.

Four Social Security cards.

Image source: Getty Images.

Know your full retirement age

Your monthly Social Security benefit is calculated based on the money you earn during your 35 most profitable years in the labor force. You're then entitled to that benefit in full once you reach full retirement age, or FRA.

FRA isn't the same for everyone. In fact, it's based on your year of birth, as shown in the following table:

If You Were Born In:

Your Full Retirement Age Is:




66 and 2 months


66 and 4 months


66 and 6 months


66 and 8 months


66 and 10 months

1960 or later


Data source: Social Security Administration.

Now here's the kicker. In a recent Nationwide survey of nearly 2,000 adults aged 25 and over, only 16% of respondents could correctly identify their FRA. But seeing as how getting that number wrong could leave you short-changed on benefits, that's a problem.

Social Security eligibility begins at age 62. But for each month you sign up for benefits ahead of your FRA, they'll be reduced on a permanent basis.

That's why it is, in fact, a big deal to think that your FRA is 65 when in reality, it's 67. If you sign up for benefits two years early, they'll shrink by 13.34%. This means that if you're entitled to a $1,500 monthly benefit at FRA, filing two years early will leave you with $1,300 a month instead.

Now, imagine you can only rely on withdrawals from your retirement savings to provide you with $500 of income per month. Suddenly, losing $200 in Social Security becomes a very big problem, because in our example, that means having to live on a total monthly income of $1,800 instead of $2,000.

Another thing you should know is that you're allowed to delay your Social Security filing past FRA. For each year you do, your benefits will increase by 8% (or two-thirds of 1% per month), up until age 70, at which point that incentive runs out. But if you don't know your FRA, you can't strategize as effectively, and you might also miscalculate how much of a boost you'll get by delaying your filing.

Be informed

Combing through Social Security's many rules may not be your idea of a good time. But the more you know about the program, the easier it'll be to squeeze more money out of it. If you're in the dark about your FRA, among other details, spend some time learning about Social Security so you can snag a higher benefit and set yourself up for a more financially secure retirement.