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The size of your monthly Social Security benefit in retirement depends partly on how old you are when you start collecting it. If you choose to begin receiving Social Security benefits at age 62, the earliest allowable age, your check will always be smaller than if you had waited until reaching your full retirement age (FRA). Remember: If you can afford it, you can retire early and not claim benefits until later.
If you take Social Security before your full retirement age:
Pro:You may be able to stop working earlier if you have a monthly Social Security check to supplement the retirement income from your savings.
Con:Your benefit will be permanently smaller than if you’d waited until your FRA, with a reduction in benefits that can vary from almost 7 percent to 30 percent. This reduction depend on what you start drawing benefits age before your FRA (the closer you are to your FRA, the smaller the reduction), and on your birth year.
If you do not take Social Security until your full retirement age:
Pro: For each year after age 62 that you don’t draw benefits, your benefit increases, reaching its maximum amount at your FRA.
Con:You may need to continue to work part-time to supplement your retirement income from your savings.
Factors to consider:
Average Life Expectancy Your current health status and behaviors and your family health history and longevity may help predict your average live expectancy. For people who expect a below-average lifespan, taking Social Security at age 62 may make more financial sense than waiting. The longer your expected lifespan, the more financial sense it makes to maximize your benefit.
Other Sources of Retirement Income. Social Security is meant to be a supplement to income from your retirement savings and/or pension. By working longer, you can continue contributing to your employer-sponsored plan and taking advantage of the employer match (if offered).
Health Coverage. Costs are skyrocketing. If you retire before age 65 and aren’t insured under an employer plan, you may face costly premiums and expenses until age 65, when you’ll become eligible for Medicare.
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