3 Rules for Early Retirement That Shrink Your Social Security Check
Written by
John Csiszar
Edited by
Zuri Anderson
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If you claim Social Security early, you’ll permanently shrink the size of your monthly check.
This doesn’t mean it’s the wrong choice, but it’s something important to consider if you’re planning early retirement. Here are some other ways that early retirement can affect your Social Security check.
Rule No. 1: Your Lifetime Cost-of-Living Adjustments Will Be Smaller
Retiring early doesn’t technically shrink the size of your cost-of-living adjustment, or COLA. You’ll still be eligible for the same percentage increase as every other retiree. But since your benefit check will be smaller if you claim early, the absolute dollar amount of your COLA increase will be smaller than it could have been.
Per the Social Security Administration (SSA), if you claim your benefits at age 62 instead of your full retirement age of 67, your monthly check will drop by 30%. This means that if your full retirement benefit was $2,000 per month, claiming early would drop that to about $1,400.
Now imagine that the SSA announces a 3% COLA. If you’re receiving the reduced monthly benefit of $1,400, that means your check will increase by $42 per month the following year. But if you had waited until you reached your full retirement age, your $2,000 monthly check would grow by $60 per month instead.
Rule No. 2: You Are Locking in a Permanent Reduction
If you retire early, your Social Security benefit doesn’t jump up once you reach your full retirement age. Instead, by claiming your benefit early, you’re locking in the lower amount for the rest of your life.
You will receive an additional five years worth of checks if you take your benefit at age 62 instead of age 67, for example. But if you live long enough, you’ll likely earn a lower lifetime payout than if you had delayed claiming your benefits.
Rule No. 3: If You Decide To Work Again, You’ll Face Another Reduction (Albeit Temporary)
If you decide to work again before you reach full retirement age, your monthly Social Security benefit might be temporarily reduced.
In 2026, per the SSA, if you earn more than $24,480, a portion of your benefits may be withheld. Specifically, the SSA will withhold $1 in benefits for every $2 that you earn above this threshold amount.
If you reach your full retirement age in 2026, the SSA withholds $1 for every $3 that you earn above a different limit, $65,160.
That money is not lost, as your benefit will be recalculated later once you reach full retirement age. But they can reduce your monthly checks until you reach that age.
What To Do Before Claiming Early
Before you decide to retire early, estimate your Social Security benefit at different ages using the official Social Security calculator, or visit your “my Social Security” account.
If you wait even a few years, you may significantly boost your monthly income — and that higher benefit will continue for the rest of your retirement.
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