Few decisions are as important as deciding when you want to claim Social Security as you approach retirement. It's a decision that will permanently affect your monthly benefit, altering how your retirement finances look.
The earliest you can claim Social Security is age 62. If you're considering claiming at this age, it's worth noting that the average monthly at this age is $1,341.61, or just below $16,100 annually.
Since your career earnings largely determine Social Security benefits, and there's an earnings gap between men and women, there's also a noticeable difference between the average benefits for men and women. The average benefit for men aged 62 is $1,485.76, while the average benefit for women at that age is $1,207.03.
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How claiming benefits at 62 affects your monthly amount
For anyone born in 1960 or later, your full retirement age (FRA) is 67. This is the age when you're eligible to receive your full monthly benefit, called your primary insurance amount (PIA).
Using your PIA as the baseline, your monthly benefit is calculated based on when you claim relative to your FRA. If we assume your FRA is 67, claiming benefits at 62 would result in a 30% reduction in your monthly amount. For example, if your PIA is $2,000, you'd only receive $1,400 by claiming at 62.
Although the reduction may not be ideal, some people may find that claiming benefits as early as possible is the best route because they would rather have smaller benefits for a longer period than larger benefits for a shorter period.
