You’ve paid into Social Security for decades, so it’s only natural to be excited about finally getting something back from the program. But it’s important not to rush your decision.

The age at which you sign up for benefits affects you in more ways than one, and it’s difficult to undo your decision once you’ve made it. For your sake and the sake of anyone who will depend on your benefits, ensure you understand the following consequences of your claiming age before you apply to avoid a costly misstep.

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Your claiming age determines your monthly benefit

You may have heard that your income during your working years determines your monthly benefit, but that’s not exactly right. The income you’ve paid Social Security taxes on throughout your career determines your primary insurance amount (PIA) — the benefit you’re entitled to if you claim Social Security at your full retirement age (FRA).

The government assigns everyone an FRA based on their birth year. For most workers today, it’s 67, but it can be as young as 66 for those born between 1943 and 1954. Regardless of yours, you’re able to sign up for Social Security as early as 62. However, the government penalizes you for applying before your FRA.

It reduces your retirement benefit by:

• 5/9 of 1% per month for the first 36 months of early claiming.
• 5/12 of 1% per month for any additional months of early claiming beyond 36.

When you claim at 62, you’re taking the maximum penalty of 25% if you have an FRA of 66, or 30% if your FRA is 67. That would reduce a $2,000 PIA to as low as $1,400 per month, and that change is permanent. Your benefit doesn’t increase when you reach your FRA, apart from one exception we’ll discuss below.

This isn’t to say that claiming earlier is bad. It depends on your life expectancy and financial situation. But it’s not a decision to make lightly. Ideally, you want to choose the age you think will net you the largest lifetime benefit overall. And that might be after your FRA. Once you pass that mark, you grow your checks by 2/3 of 1% per month until 70. However, you can’t grow your benefits any further after this, so make sure you apply before your 70th birthday.

Your claiming age affects your likelihood of encountering the earnings test

The Social Security Administration could reduce your monthly checks more than the penalties outlined above if you’re working and claiming Social Security at the same time. This is known as the earnings test. In 2024, you lose $1 for every $2 from your checks if you earn more than $22,320. If you reach your FRA this year, you only lose $1 for every $3 you earn over $59,520 before your birthday. These limits will rise to $23,400 and $62,160, respectively, for 2025.

If you’re a high earner, claiming early could drastically reduce or even eliminate your Social Security checks entirely. For example, say you’ll be under your FRA for all of 2025, and you qualify for a $2,000 monthly benefit. If you earn $71,400 or more from your job, you won’t receive a check at all because the government will withhold everything due to the earnings test.

You’re not losing that money forever. When you reach your FRA, the government bumps up your benefit to account for money it withheld due to the earnings test. But if you received anything at all under your FRA, your new benefit will still be less than what you would’ve gotten had you just delayed benefits until your FRA in the first place.

Again, this isn’t to discourage you if you want to work and claim at the same time. If you reduce your work hours and supplement your lost income with Social Security, this could work fine for you. But if you think you’re in danger of losing substantial amounts to the earnings test, delaying benefits could serve you better in the long run.

Your claiming age affects your spouse’s survivor benefit

If you’re eligible for or are already claiming Social Security retirement benefits when you die, your spouse and any qualifying dependents are eligible for survivor benefits. Their benefits are based on the amount you were receiving or could have received at the time of your death.

This means that if you claim Social Security early, you’re not only permanently reducing your own benefit. You’re also shrinking the survivors’ benefits your loved ones may have to live on after you’re gone. If your family doesn’t have a lot of extra resources, this could be devastating.

It’s important to talk through your potential claiming age with your spouse, if you’re married, to ensure you make the best choice for all members of your household. Think through how your claiming age will affect each of the three things above, and make sure you’re comfortable with the consequences of your decision before you apply for benefits.

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