You get to decide when you're ready to claim Social Security, but you still have to play by the government's rules. For starters, you can't sign up for retirement benefits until you're at least 62. And your age at claiming will have a big effect on how much money you receive from the program.
It's important to understand how your starting age will affect you down the line, especially if you're thinking about signing up for the program right away. Here's what you need to know.
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What's considered early claiming?
You must wait until your full retirement age (FRA) in order to get the full Social Security benefit you've earned based on your work history. Your FRA depends on your birth year and may not be the same age at which you actually retire. For most workers today, it's somewhere between 66 and 67.
You are free to claim earlier than this if you'd like. Or you can delay benefits past your FRA. Your decision will have lasting consequences on your monthly checks.
How does early claiming affect your Social Security benefit?
There are a few ways claiming Social Security early can affect your Social Security benefits, including:
Smaller monthly checks
Every month you claim benefits under your FRA shrinks your Social Security checks by anywhere from five-twelfths of 1% to five-ninths of 1% per month. Those who claim right away at 62 will only get 70% to 75% of their full benefit per check, depending on their FRA.
Every month you put off claiming increases your checks slightly until you qualify for your maximum benefit at 70. That's 124% of your full benefit per check if your FRA is 67 or 132% if your FRA is 66.
Possible withholding based on income
Those who work while claiming Social Security before reaching their FRA can run into the Social Security earnings test. In 2023, those who will be younger than their FRA all year lose $1 from their benefit checks for every $2 they earn over $21,240. Those who will reach their FRA this year only lose $1 for every $3 they earn over $56,520 if they exceed this amount before their birthday.
This could further reduce your benefit in the short term, but this money isn't gone forever. When you reach your FRA, the Social Security Administration recalculates your benefit to include the money it previously withheld, leading to slightly larger checks going forward.
Possible reduced lifetime benefit
Claiming Social Security early could also reduce the lifetime benefit you receive from the program, though this isn't always the case. It depends on your life expectancy. Those who don't expect to live beyond their 70s often do better by signing up early. If they delay, there's a chance they could miss out on benefits altogether.
But those who think they'll live into their 80s or beyond could possibly earn a larger lifetime benefit by delaying Social Security until their FRA or older. However, you also have to consider your financial situation to decide whether this is feasible for you.
As long as you've worked long enough to qualify, you should be able to count on some Social Security money to help you with your retirement expenses, regardless of when you claim. The above information isn't intended to deter you from claiming early if that's what you think is best. Just make sure you understand the consequences of that decision so you don't run into any unpleasant surprises later.
