Retirement can be incredibly expensive, and most Americans need to lean on Social Security to some extent to make ends meet. In fact, 43% of baby boomers say their benefits will be their primary source of income in retirement, according to a 2024 report from the Transamerica Center for Retirement Studies.

Whether you’re retiring in 2025 or still have decades left in your career, it’s wise to ensure you know exactly how Social Security will fit into your retirement plans. And there’s one critical move everyone should make right now.

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One figure every worker needs to know

If you haven’t yet checked your estimated benefit amount online through your mySocialSecurity account, that’s a fantastic place to start. But an arguably even more important figure to know is your full retirement age (FRA).

Your FRA is the age at which you’re eligible to receive your full benefit based on your career earnings and work history. This is the amount you’ll see when you check your estimated benefit online, but if you’re uncertain of your exact FRA, it could affect your income by hundreds of dollars per month.

The average U.S. adult age 60 to 65 believes their FRA is 64 years old, a 2024 survey from the Nationwide Retirement Institute found. However, your actual FRA will be between ages 66 and 67, depending on the year you were born.

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In other words, millions of older adults may be expecting their full benefit amount when they file when they’re actually claiming two to three years early. That may seem like a harmless misunderstanding, but it could be incredibly costly.

By filing before your FRA, your benefits will be reduced every month for the rest of your life. If you have an FRA of 67 and you file at 64, you’ll face a reduction of 20%. File as early as possible at age 62, and your benefits will be permanently reduced by 30%.

These reductions can sometimes amount to hundreds of dollars per month. The average retiree collects around $1,975 per month in benefits, according to December 2024 data from the Social Security Administration. A 20% reduction would come out to $395 per month, or $4,740 per year. A 30% cut would amount to around $593 per month, or more than $7,100 per year.

Filing early isn’t always a bad thing

It’s important to note that despite the benefit reductions, there are valid reasons to consider filing early.

For example, claiming early can be a good idea if your health is declining or you want to retire in your early 60s to enjoy a more active retirement. You might need to make some financial sacrifices by taking benefits early. But not everyone wants to wait until age 66 or beyond to retire and start taking Social Security, and that’s OK.

Filing early can also be part of a strategy with your spouse if you’re both entitled to Social Security. Perhaps one of you files at 62 for an income boost early in retirement, for instance, while the other delays claiming by a few years to earn larger checks.

Whatever your decision, knowing your exact FRA will make it easier to plan accordingly. Social Security can be a lifeline in retirement for millions of older adults, and when you know exactly what you’ll collect each month and how your age will affect that figure, you can make the best decision to meet your unique goals.

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