Millions of seniors regard Social Security as a major retirement income source. And for some, those monthly benefits are their only source of income.

Meanwhile, seniors on Social Security recently got a bit of good news. In 2023, benefits will be eligible for an 8.7% cost-of-living adjustment (COLA), and that could go a long way toward helping recipients maintain their buying power as living costs surge.

But if you're not careful, you could end up shrinking your Social Security benefits next year. And that's a mistake you might then regret for the long haul.

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Filing early will cost you

If you're turning 62 in 2023, you'll be allowed to sign up for Social Security if you're not receiving benefits already, since that's the earliest age at which you can file. But if you go that route, you'll end up with a lower monthly benefit -- potentially for life -- by virtue of not waiting until full retirement age (FRA) to file your claim.

FRA is when you're eligible for your complete monthly Social Security benefit based on your year of birth. You can consult this table to see what yours looks like:

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


Data source: Social Security Administration.

Even if you're older than 62 right now, if you file for Social Security in 2023 and you haven't reached FRA by then, you'll reduce your monthly benefits by some degree. It may not be the same, more extreme reduction you'll face by filing as early as possible -- but your benefits will be slashed, nonetheless.

When should you file for Social Security?

Although claiming Social Security before FRA will mean getting stuck with a lower monthly benefit, filing early isn't automatically a poor choice. But before you make that call, think about what your entire financial picture looks like.

If you don't have a lot of money stashed away in savings, you may end up regarding Social Security as your primary retirement income source. In that case, you may not want to file early and get stuck with less monthly income for life.

But if you're in the opposite boat -- your IRA or 401(k) plan has millions in it -- then you may not care what monthly benefit Social Security pays you, as long as you get something. And you may decide that if you're eligible to first claim Social Security in 2023, you're going to do so and let those benefits lead you to an early retirement -- because you've saved enough to buy yourself that option.

All told, seniors on Social Security could see a nice lift in their benefits once 2023 begins. But if you file for benefits early, you may end up disappointed in how little money Social Security pays you -- not just next year, but throughout your retirement.

Take the time to think about when to sign up and talk things through with your spouse, if you have one. That way, you can arrive at a joint strategy that helps both of you make the most of the benefits you're entitled to.