How much will my Social Security benefits be reduced if I draw it early ?
The amount Social Security benefits are reduced by is determined by age at retirement and year of birth. Taking early retirement lowers payments permanently. Early retirement is retirement before the month in which a person reaches full retirement age. The reduction percent also differs between wage-earner and spouse.
How Much Smaller Will My Check Be If I Retire At 62?
The current graduated rate of full retirement means that people born in different years have their Social Security benefits reduced by different amounts. Wage-earners born between 1943 and 1954 reach full retirement at 66. If those same people choose early retirement at 62, their Social Security benefit check is reduced by 25 percent for the whole of their retirement. This is the oldest group currently not all at full retirement age. The reduction grows larger for each age group after, reaching 30 percent for those born in 1960 and later.
I'll Only Collect Spouse Benefits, What About Me?
Like wage-earners, those who choose to collect spousal Social Security benefits early will also find their checks reduced. The age of full retirement is the same, but the percent of reduction is different. Spousal benefits are 50 percent of the wage-earner's benefit, and early retirement will take another 30 to 35 percent from the remaining amount.
What If I Retire At 64 Or 65?
The percent Social Security lowers benefit checks is based on the number of months a recipient is expected to live. Collecting for fewer months means a lower reduction, down to only a fraction of a percent for those retiring a month before full retirement age.
What Happens To The Money? Does Social Security Just Keep It?
The total amount received over a person's lifetime is the same. The reduced payments balance out over a longer payment schedule.