Social Security is one of America's most essential social programs. It keeps millions of retirees out of poverty, and provides much-needed financial security for millions of others.
There's plenty to like about Social Security retirement benefits, but one thing is for sure: It's not the easiest program to navigate. There are lots of nuances, annual changes, and seemingly everything in between.
Despite the complexity surrounding Social Security, one of the best things you can do is focus on the few key details with the most effect. Though several variables and numbers are important, one arguably trumps them all: The full retirement age (FRA).
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How your monthly benefits relate to your full retirement age
Your FRA is when you're eligible to receive your primary insurance amount (PIA). You can think of this amount as your baseline or starting benefit. From there, Social Security adjusts your monthly benefit based on how soon before or after your FRA you claim benefits.
Claiming benefits before your FRA will reduce your monthly benefit, depending on how far away you are from your FRA.
If you're within 36 months of your FRA, your monthly benefit is reduced by 5/9 of 1% for each month you claim early. Any additional month after 36 further reduces benefits by 5/12 of 1%, with age 62 being the earliest you can claim.
Using someone with a FRA of 67 as an example, here's how much monthly benefits would be reduced based on different claiming ages:
| Claiming Age | Monthly Benefit Reduction |
|---|---|
| 66 | 6.67% |
| 65 | 13.33% |
| 64 | 20% |
| 63 | 25% |
| 62 | 30% |
Data source: Social Security Administration. Table by author.
Claiming benefits after your FRA has the opposite effect, increasing them by 2/3 of 1% monthly, or 8% annually, until you turn 70. After 70, monthly benefits are no longer increased.
Full retirement age also affects spousal benefits
Spousal benefits allow someone to receive up to 50% of their spouse's monthly benefit. Like regular benefits, spousal benefits also revolve around FRA.
Someone can claim spousal benefits at age 62 (or earlier if you're caring for a disabled child younger than 16), but you're only eligible to receive the full 50% if you're at your FRA.
Claiming spousal benefits before your FRA also reduces them, but by different percentages than standard benefits. Spousal benefits are reduced by 25/36 of 1% for each month before your FRA, up to 36 months. Each additional month reduces your benefits by 5/12 of 1%.
Assuming your FRA is 67, here's how much spousal benefits could be reduced based on claiming age:
| Claiming Age | Monthly Benefit Reduction |
|---|---|
| 66 | 8.33% |
| 65 | 16.67% |
| 64 | 25% |
| 63 | 30% |
| 62 | 35% |
Data source: Social Security Administration. Table by author.
Unlike standard benefits, spousal benefits aren't increased if you delay them past your FRA. So, if you're planning to claim spousal benefits and are eligible to do so, there's no advantage to delaying past your FRA.
Working while claiming benefits before your full retirement age
Claiming Social Security doesn't mean you must stop working or earning money. However, it does mean you'll need to monitor how much you make if you've claimed benefits before your FRA.
If you claim benefits before your FRA and continue working and earning over a certain amount, you'll face the Social Security retirement earnings test (RET), which reduces your monthly benefit based on how much you earn over the given limit for the year.
For 2025, the earnings limit is $23,400 for people who won't reach their FRA this year. Earning more than that will reduce your annual benefits by $1 for every $2 above that limit. For example, earning $10,000 over the limit would reduce your benefits by $5,000.
If you'll reach your FRA in 2025, the limit is $62,160. Earning above that before you reach your FRA will reduce benefits by $1 for every $3. In this case, if you were to earn $9,000 above the limit, your benefit would be reduced by $3,000.
Once you reach your FRA, Social Security will recalculate your monthly benefit to adjust for the months your benefits were withheld, increasing your payments over the rest of your life.
