There’s a reason seniors are told to think carefully before signing up for their Social Security benefits. The age at which you file your claim will have a direct impact on the amount of money Social Security pays you each month.
Filing for Social Security at full retirement age (FRA) means you’ll avoid any sort of reduction to your monthly benefits. FRA is 67 for people born in 1960 or later, but it varies slightly for earlier birth years—check SSA.gov for your exact age.
However, you’re allowed to claim Social Security once you turn 62. And the further away from FRA you are, the more of a hit to your benefits an early filing will cause.
For example, if you claim Social Security a year early, you’ll reduce your benefits by about 6.67%. But if you claim Social Security at 62 with an FRA of 67, that’s five years early, and it will result in a 30% reduction. Keep in mind, these reductions are permanent, though annual cost-of-living adjustments (COLAs) apply to the lower base amount.
On the flipside, if you delay Social Security past FRA, your monthly benefits get to increase 8% per year until you turn 70, potentially boosting your lifetime income significantly if you live longer than average.
However, waiting on Social Security is a tough thing. It could mean having to work longer than you want and having to put off the retirement goals you’ve always dreamed of. So you may be more inclined to file for benefits early rather than late. Factors like health and family longevity should influence this—claiming early might make sense if you expect a shorter lifespan, but delaying could maximize benefits for survivors or spouses.
But you should know that claiming Social Security early could have a huge financial impact on your retirement. And that’s not just because of the reduced monthly benefits you’ll be left with.
An early claim could affect your savings
It’s not a given that people who claim Social Security early also stop working right away. In fact, you’re allowed to collect Social Security while also getting paid from a job.
But if you file for Social Security before FRA while you’re still working, you’ll be subjected to income limits. And exceeding those limits could mean having some of your Social Security withheld. For 2025, the earnings test withholds $1 for every $2 over $22,320 if under FRA, or $1 for every $3 over $59,520 in the year you reach FRA—benefits are later recalculated, but it disrupts cash flow.
Plus, the fact of the matter is that a lot of people claim Social Security early so that they can retire at the same time. But that could mean missing out on years of retirement plan contributions and needing to stretch your savings longer. Early retirement also increases the risk of depleting funds faster due to healthcare costs or market downturns.
Let’s say you reach age 62 with $1 million in your 401(k). That’s not a small amount of money. But if you were to work an extra five years, all the while contributing an additional $15,000 per year to your 401(k) and earning a conservative 5% return, you’d be looking at about $1.36 million instead.
That could make a big difference in the context of your retirement spending. That extra $360,000 could result in more annual income plus give you a cushion in case surprise expenses like home repairs pop up. Calculate your personal break-even age—the point where delayed benefits surpass early ones—often around age 78-80 for many.
Talk to a professional before claiming Social Security early
It’s not automatically an unwise choice to sign up for Social Security early. If you have a nice nest egg, for example, as well as a stressful job, an early claim could be your ticket out of a bad work situation you deserve to escape. And if you’ve saved enough that you don’t need to worry about the reduction in benefits, there’s not so much of an issue.
But before you claim Social Security, it’s a good idea to consult with a financial advisor and talk through your options. They can show you the impact of taking benefits at different ages so you can make a more informed decision. Tools like the SSA’s online calculators or advisor software can model scenarios tailored to your situation.
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