Social Security offers a wide variety of benefits and services to individuals of all ages, just one of which is the opportunity for workers to start collecting their retirement benefits at age 62. This is known as “Social Security Early Retirement,” and if you choose to take early retirement, then Social Security will reduce your benefit amount based on the number of months you will be receiving benefits before reaching full retirement age.

If you are wondering what this means, here is an example to help you: the chart below was taken directly from Social Security’s webpage, and it shows a wide range of benefit amounts, including an individual with a full retirement age of 66 receiving a 25% reduction in benefits if they chose to retire early at age 62. Therefore, this individual would be receiving 75% of the monthly benefit they would have received if they had waited until full retirement age. Please refer to this chart for even more examples of how Social Security calculates your benefit reduction.

 

Primary and spousal benefits at age 62 (benefits based on a $1,000 primary insurance amount)
Year of birth	Normal (or full) retirement age	Number of reduction months	Primary		Spouse
			Amount	Percent reduction	Amount	Percent reduction
1937 or earlier	65	36	$800	20.00%	$375	25.00%
1938	65 and 2 months	38	791	20.83%	370	25.83%
1939	65 and 4 months	40	783	21.67%	366	26.67%
1940	65 and 6 months	42	775	22.50%	362	27.50%
1941	65 and 8 months	44	766	23.33%	358	28.33%
1942	65 and 10 months	46	758	24.17%	354	29.17%
1943-1954	66	48	750	25.00%	350	30.00%
1955	66 and 2 months	50	741	25.83%	345	30.83%
1956	66 and 4 months	52	733	26.67%	341	31.67%
1957	66 and 6 months	54	725	27.50%	337	32.50%
1958	66 and 8 months	56	716	28.33%	333	33.33%
1959	66 and 10 months	58	708	29.17%	329	34.17%
1960 and later	67	60	700	30.00%	325	35.00%

 

If you currently have an open Social Security Disability Insurance (SSDI) claim and are considering early retirement, you may also be wondering how this would affect your SSDI claim. Simply put, you would be able to receive the reduced retirement benefits while you are waiting for the decision of Social Security Disability benefits. The monthly SSDI benefits is likely to be higher than the early retirement benefit because it will not be subject to the benefit reduction.  If you are awarded SSDI benefits, Social Security will pay you the higher benefit.

Please let us know if you ever have questions about your SSDI benefits, or about how other benefits you collect could impact what you may receive from Social Security.

This post was written by one of our Client Advocates, Melissa.

 

Nothing in this post is intended as advice or a suggestion to elect or not elect to claim benefits of any kind, including Social Security benefits, nor is it intended as financial advice in any way.  The decision to claim benefits is a personal one that is contingent upon each individual’s unique circumstances.