Newsletter Articles

How Early Retirement Affects Your Social Security Benefits

By: Michael Rubin

Elder Law Associates Newsletter dated May 14, 2019

An early retirement has significant implications on how your Social Security benefit is calculated. For Social Security purposes, an early retirement is one where you claim your benefits prior to your normal retirement age. For every month you retire prior to your normal retirement age, your benefit is reduced by 5/9 of 1 percent per month for the first 36 months and 5/12 of 1 percent for each additional month. This results in a reduced benefit of approximately 0.6 percent.

The best way to determine when to claim your Social Security benefit is to run a few "what-if" scenarios. You can start by setting up your account at the Social Security Administration website. Using your desired start date, you can also review a calculator designed to help you determine when to claim social security.

Retirement age of 67

If your normal retirement age is 67, then your early retirement benefit will be reduced by the following percentage at each listed age:

    62: 30%
    62 + 1 month: 29.6%
    62 + 2 months: 29.2%
    62 + 3 months: 28.7%
    62 + 4 months: 28.3%
    62 + 5 months: 27.9%
    62 + 6 months: 27.5%
    62 + 7 months: 27.1%
    62 + 8 months: 26.7%
    62 + 9 months: 26.2%
    62 + 10 months: 25.8%
    62 + 11 months: 25.4%
    63: 25%
    63 + 1 month: 24.6%
    63 + 2 months: 24.2%
    63 + 3 months: 23.7%
    63 + 4 months: 23.3%
    63 + 5 months: 22.9%
    63 + 6 months: 22.5%
    63 + 7 months: 22.1%
    63 + 8 months: 21.7%
    63 + 9 months: 21.2%
    63 + 10 months: 20.8%
    63 + 11 months: 20.4%
    64: 20%
    64 + 1 month: 19.4%
    64 + 2 months: 18.9%
    64 + 3 months: 18.3%
    64 + 4 months: 17.8%
    64 + 5 months: 17.2%
    64 + 6 months: 16.7%
    64 + 7 months: 16.1%
    64 + 8 months: 15.6%
    64 + 9 months: 15%
    64 + 10 months: 14.4%
    64 + 11 months: 13.9%
    65: 13.3%
    65 + 1 month: 12.8%
    65 + 2 months: 12.2%
    65 + 3 months: 11.7%
    65 + 4 months: 11.1%
    65 + 5 months: 10.6%
    65 + 6 months: 10%
    65 + 7 months: 9.4%
    65 + 8 months: 8.9%
    65 + 9 months: 8.3%
    65 + 10 months: 7.8%
    65 + 11 months: 7.2%
    66: 6.7%
    66 + 1 month: 6.1%
    66 + 2 months: 5.6%
    66 + 3 months: 5%
    66 + 4 months: 4.4%
    66 + 5 months: 3.90%
    66 + 6 months: 3.3%
    66 + 7 months: 2.8%
    66 + 8 months: 2.2%
    66 + 9 months: 1.7%
    66 + 10 months: 1.1%
    66 + 11 months: 0.6%
    67: 0%

Retirement age of 66

If your normal retirement age is 66, then your early retirement benefit will be reduced by the following percentage at each listed age:

    62: 25%
    62 + 1 month: 24.6%
    62 + 2 months: 24.2%
    62 + 3 months: 23.7%
    62 + 4 months: 23.3%
    62 + 5 months: 22.9%
    62 + 6 months: 22.5%
    62 + 7 months: 22.1%
    62 + 8 months: 21.7%
    62 + 9 months: 21.2%
    62 + 10 months: 20.8%
    62 + 11 months: 20.4%
    63: 20.0%
    63 + 1 month: 19.4%
    63 + 2 months: 18.9%
    63 + 3 months: 18.3%
    63 + 4 months: 17.8%
    63 + 5 months: 17.2%
    63 + 6 months: 16.7%
    63 + 7 months: 16.1%
    63 + 8 months: 15.6%
    63 + 9 months: 15.0%
    63 + 10 months: 14.4%
    63 + 11 months: 13.9%
    64: 13.3%
    64 + 1 month: 12.8%
    64 + 2 months: 12.2%
    64 + 3 months: 11.7%
    64 + 4 months: 11.1%
    64 + 5 months: 10.6%
    64 + 6 months: 10.0%
    64 + 7 months: 9.4%
    64 + 8 months: 8.9%
    64 + 9 months: 8.3%
    64 + 10 months: 7.8%
    64 + 11 months: 7.2%
    65: 6.7%
    65 + 1 month: 6.1%
    65 + 2 months: 5.6%
    65 + 3 months: 5%
    65 + 4 months: 4.4%
    65 + 5 months: 3.90%
    65 + 6 months: 3.3%
    65 + 7 months: 2.8%
    65 + 8 months: 2.2%
    65 + 9 months: 1.7%
    65 + 10 months: 1.1%
    65 + 11 months: 0.6%
    66: 0%

If you were born between 1955 and 1959 your full retirement age will be as follows:

    1955: 66 and 2 months
    1956: 66 and 4 months
    1957: 66 and 6 months
    1958: 66 and 8 months
    1959: 66 and 10 months

Note: If you were born between 1955 and 1959, you can visit the Social Security Administration website to determine the benefit reduction based on your year of birth.

Retirement age of 65

If your normal retirement age is 65, then your early retirement benefit will be the following percentage of your normal retirement benefit at each age:

    62: 20%
    62 + 1 month: 19.4%
    62 + 2 months: 18.9%
    62 + 3 months: 18.3%
    62 + 4 months: 17.8%
    62 + 5 months: 17.2%
    62 + 6 months: 16.7%
    62 + 7 months: 16.1%
    62 + 8 months: 15.6%
    62 + 9 months: 15%
    62 + 10 months: 14.4%
    62 + 11 months: 13.9%
    63: 13.3%
    63 + 1 month: 12.8%
    63 + 2 months: 12.2%
    63 + 3 months: 11.7%
    63 + 4 months: 11.1%
    63 + 5 months: 10.6%
    63 + 6 months: 10%
    63 + 7 months: 9.40%
    63 + 8 months: 8.90%
    63 + 9 months: 8.3%
    63 + 10 months: 7.8%
    63 + 11 months: 7.2%
    64: 6.7%
    64 + 1 month: 6.10%
    64 + 2 months: 5.60%
    64 + 3 months: 5%
    64 + 4 months: 4.40%
    64 + 5 months: 3.90%
    64 + 6 months: 3.3%
    64 + 7 months: 2.8%
    64 + 8 months: 2.2%
    64 + 9 months: 1.7%
    64 + 10 months: 1.10%
    64 + 11 months: 0.60%
    65: 0%


Article Source: thebalance.com