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Retiring early and claiming Social Security early are not the same decision. If you stop working before building a full 35-year earnings record, or before higher-earning years can replace lower ones, your monthly benefit may be smaller. Separately, claiming Social Security before full retirement age permanently reduces your monthly payment, while delaying past full retirement age can earn delayed retirement credits through age 70. Understanding both effects can help you decide when to leave work and when to start collecting benefits.
A financial advisor can help you compare your retirement income and Social Security claiming options.
When Can I Get Social Security?
The earliest you can start receiving Social Security retirement benefits is age 62. However, the age you stop working and the age you start collecting Social Security do not have to be the same. If you claim before full retirement age, your monthly benefit will be reduced. For someone born in 1960 or later, full retirement age is 67, and claiming at 62 can reduce the worker’s retirement benefit by as much as 30%. Waiting until full retirement age avoids that age-based reduction, while delaying beyond full retirement age can earn delayed retirement credits through age 70.
If you decide to retire early, you have the option of delaying your Social Security benefits. For example, someone might stop working at 60 but use savings, investments or other income to cover expenses until claiming Social Security at 67 or 70. The trade-off is that you need enough income to fund the years between leaving work and starting benefits.
Early Retirement and Social Security Payments
The calculations for Social Security benefits come from your highest 35 years of earnings. That’s how the Social Security Administration comes up with your average indexed monthly earnings (AIME). If you have fewer than 35 years of earnings, SSA generally includes a zero for each missing year. Even with 35 years of earnings, working longer could increase your benefit if a new, higher-earning year replaces a lower year in the calculation.
Retiring early does not automatically mean giving up delayed retirement credits. You can stop working before full retirement age and still wait to claim Social Security. For people born in 1943 or later, delaying benefits after full retirement age generally earns delayed retirement credits at a rate of 8% per year, or two-thirds of 1% per month, through age 70. For someone with an FRA of 67, delaying until 70 can produce a benefit equal to about 124% of their full-retirement-age amount, before considering applicable COLAs.
Social Security could provide a portion of your retirement income. Use SmartAsset’s Social Security Calculator to estimate how much you may receive in benefits.
The table below comes from the Social Security Administration’s benefits retirement planner and calculates the monthly increase rate by birth year.
Delayed Retirement Increase 1
| Birth Years | 12-Month Increase Rate | Monthly Increase Rate |
|---|---|---|
| 1933 to 1934 | 5.5% | 11/24 of 1% |
| 1935 to 1936 | 6% | 1/2 of 1% |
| 1937 to 1938 | 6.5% | 13/24 of 1% |
| 1939 to 1940 | 7% | 7/12 of 1% |
| 1941 to 1942 | 7.5% | 5/8 of 1% |
| 1943 and later | 8% | 2/3 of 1% |
By comparison, if you choose to retire early, your Social Security check gets reduced by 5/9 of 1% for each month you collect benefits before your full retirement age (up to 36 months). If you retire more than 36 months early (up to a maximum of 60), your Social Security benefit will be reduced by an additional 5/12 of 1% per extra month.
This means that the maximum number of retirement months is 60 for those retiring at age 62 when the full retirement age is 67. So your benefits could be reduced by up to 30%. Social Security calculates this maximum by multiplying 36 months by 5/9 of 1% and then adds a total of 24 months multiplied by 5/12 of 1%.
Strategies to Offset Early Retirement on Social Security
If you plan to retire before reaching full retirement age, it’s important to explore ways to reduce the financial impact that leaving work early could have on your Social Security benefit and retirement income. One option is to stop working but delay claiming Social Security. From age 62 to full retirement age, waiting reduces the early-claiming reduction that would otherwise apply. After full retirement age, each month of additional delay can earn delayed retirement credits until age 70. Using other income sources, such as savings, investments or part-time work, may allow you to bridge the gap before benefits begin.
Another approach involves continuing to build your earnings record before claiming benefits. Since Social Security is based on your highest 35 years of wages, even a few more years of work at a higher salary can improve your benefit calculation. If you retire early but still earn some income through consulting or part-time work, those additional earnings may replace lower-earning years in your record.
It can also help to coordinate Social Security with other retirement income sources. Balancing withdrawals from IRAs, 401(k)s or taxable accounts may help manage taxable income during the years before Social Security begins. The appropriate withdrawal order will depend on your taxes, account types, required minimum distributions and other income sources.
Lastly, planning for healthcare expenses is essential, as early retirees often face a coverage gap before they are generally first eligible for Medicare at age 65. Factoring healthcare into your retirement budget can reduce the need for unexpected withdrawals or debt before Medicare eligibility.
Use our retirement calculator to help you determine whether you’re on track for your financial needs in retirement:
What If I Want to Work in Retirement?
Sometimes leaving the workforce is neither feasible nor appealing. That’s why some retirees find part-time jobs to pass the time or earn extra money. Getting a part-time job after retiring early can cause some Social Security benefits to be temporarily withheld if you are below full retirement age and your earnings exceed the annual retirement earnings test limit.
For 2026, if you are under full retirement age for the entire year, the earnings limit is $24,480, with $1 in benefits withheld for every $2 earned above the limit. 2 If you reach FRA during 2026, the higher limit is $65,160 and applies only to earnings before the month you reach FRA; $1 is withheld for every $3 above that limit. SSA has announced that these limits will increase to $25,560 and $67,920, respectively, for 2027.
Benefits withheld under the earnings test are not simply returned in a lump sum when you reach FRA. Instead, once you reach FRA, SSA recalculates your monthly benefit to give you credit for months in which benefits were reduced or withheld because of excess earnings. Beginning with the month you reach FRA, the earnings test no longer applies.
Does Early Retirement Affect Social Security’s Finances?
One person’s decision to retire or claim Social Security early does not translate directly into an equivalent loss for the Social Security system. People who claim retirement benefits before full retirement age generally receive smaller monthly payments, while people who delay can receive larger payments. Program finances also depend on broader factors such as employment, wages, demographics, mortality and payroll-tax revenue.
That said, Social Security faces a long-term financing shortfall. The 2026 Social Security Trustees Report projects that the Old-Age and Survivors Insurance Trust Fund can pay scheduled benefits in full until 2032. If Congress made no changes before reserves were depleted, continuing income would be sufficient to pay about 78% of scheduled OASI benefits at that point. That projected shortfall reflects the program’s overall finances rather than simply the number of people who choose to retire early.
How Much Will Early Retirement Cost in Social Security Benefits?
The monthly reduction from claiming early can feel manageable when you are looking at a single paycheck, but the decision plays out over decades. Total lifetime benefits, not monthly amounts, can provide another way to compare claiming ages, although the eventual outcome depends on how long you live and other factors.
Start with a simple illustration. A retiree with a $2,000 monthly benefit at full retirement age has three primary claiming windows. Taking benefits at 62 shrinks that payment by 30%, landing at $1,400 a month. Holding off until 70 grows it by 24%, producing $2,480 a month. The difference between those two paths is $1,080 per month for the rest of that person’s life.
Over a shorter retirement, the early claimer’s head start keeps the totals competitive. Someone collecting $1,400 from age 62 through age 82 receives $336,000 in cumulative benefits. A retiree who waits until 67 and collects through the same age receives $360,000. One who delays until 70 receives $357,120 through age 82. These figures ignore COLAs, taxes and potential investment returns and are intended only to illustrate the trade-off between an earlier start and a larger monthly benefit.
Extend the retirement to age 87 and the picture changes. The early claimer reaches $420,000 in total benefits. The full retirement age claimer reaches $480,000. The retiree who waited until 70 reaches $505,920. That puts the age-70 strategy $85,920 ahead of the age-62 strategy in this simplified example. Based on these assumed payments, the approximate break-even age is about 79 when comparing 62 with 67, about 80 when comparing 62 with 70 and about 82½ when comparing 67 with 70.
Married Couples and COLA
Married couples have an added reason to think carefully about this. When one spouse dies, the surviving spouse may qualify for a survivor benefit based on the deceased spouse’s record. At survivor full retirement age, that benefit can generally be as much as 100% of the deceased worker’s applicable benefit. If the survivor also qualifies for retirement benefits on their own record, SSA generally pays an amount equal to the higher benefit rather than both full payments. Delayed retirement credits earned by the higher-earning spouse can therefore increase the benefit available to a surviving spouse.
Cost-of-living adjustments can also affect benefits while someone delays claiming. SSA applies applicable COLAs to the primary insurance amount and then applies the adjustment for early or delayed retirement. For 2027, Social Security has announced a 3.6% COLA. Taxes and the opportunity cost of using savings while delaying Social Security can also affect the real-world comparison.
Bottom Line
Not everyone can retire early, but let’s say you’re preparing to quit your job before you reach your full retirement age. In that case, it’s important to think about how that might affect the size of your Social Security checks. If you can wait to take Social Security, you’ll end up with larger benefit checks. Whatever you choose to do, it’s best to make sure your money will last throughout your entire retirement. A financial advisor can help you develop a budget that meets your retirement goals.
Tips for Retirement Planning
- Retirement planning with a financial advisor can be extremely helpful. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Figure out how much you’ll need to save to retire comfortably. An easy way to get ahead on saving for retirement is by taking advantage of employer 401(k) matching.
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Article Sources
All articles are reviewed and updated by SmartAsset’s fact-checkers for accuracy. Visit our Editorial Policy for more details on our overall journalistic standards.
- Social Security Administration. https://www.ssa.gov/benefits/retirement/planner/delayret.html. Accessed Apr. 23, 2026.
- Social Security Administration. https://www.ssa.gov/benefits/retirement/planner/whileworking.html. Accessed Apr. 23, 2026.