Claiming Social Security at the wrong age could permanently shrink retirement checks by hundreds of dollars every month.
Social Security’s fine print: the income rule that can shrink your monthly benefit check
Retirement is rarely as simple as it sounds, especially when it comes to claiming Social Security benefits. One wrong decision could end up costing retirees hundreds – or even thousands – of dollars every single month.
The Social Security Administration (SSA) explains that workers must earn 40 credits to qualify for retirement benefits. These credits are accumulated by working and paying Social Security taxes, with a maximum of four credits available per year.
Because workers can earn four credits annually, it takes about 10 years of employment to become eligible for Social Security retirement payments. But qualifying as early as possible does not necessarily mean claiming benefits immediately is the smartest move.
Why waiting longer can increase monthly checks
The amount retirees receive each month is based on their 35 highest-earning years of work. If someone has fewer than 35 years of earnings on record, the missing years are counted as zeroes, which lowers the average benefit calculation.
Another key factor is the age at which benefits are claimed. Workers can start receiving retirement benefits at age 62, but the SSA warns that early retirement is not the best option for everyone.
The agency recommends waiting until full retirement age to receive complete benefits. Claiming before that age permanently reduces monthly payments.
Full retirement age depends on the year a worker was born. People born between 1943 and 1954 reach full retirement age at 66. For those born between 1955 and 1959, the age gradually increases. Anyone born in 1960 or later reaches full retirement age at 67.
Retiring at 62 could slash benefits by 30%
According to the SSA, a worker whose full retirement age is 67 would receive 30% less by claiming benefits at age 62.
For example, someone eligible for a $2,000 monthly payment at age 67 would receive about $1,400 if they retire at 62. That means losing $600 every month – or $7,200 per year.
The SSA also warns that retirees who claim benefits early while continuing to work may see additional reductions if their income exceeds annual earnings limits.
Delaying benefits could boost payments significantly
Workers who delay claiming benefits beyond full retirement age can increase their monthly checks substantially. Those who wait until age 70 receive an additional 24% in benefits.
These are the maximum monthly Social Security retirement benefits currently available depending on retirement age:
- Age 62: $2,969
- Age 65: $3,467
- Age 66: $3,752
- Age 67: $4,207
- Age 70 and older: $5,181
For many Americans, deciding when to claim Social Security may be one of the most important financial choices of retirement.
Get closer to the game! Whether you like your soccer of the European variety or that on this side of the pond, our AS USA app has it all. Dive into live coverage, expert insights, breaking news, exclusive videos, and more. Plus, stay updated on NFL, NBA and all other big sports stories as well as the latest in current affairs and entertainment. Download now for all-access coverage, right at your fingertips – anytime, anywhere.
And there’s more: check out our TikTok and Instagram reels for bite-sized visual takes on all the biggest soccer news and insights.