Will early retirement hurt my Social Security benefit?


Q. I am going to retire early at 52. I wasn’t planning to take Social Security until I have to, hopefully age 70. Will my benefit be smaller because I’m retiring early? Or how will it grow between now and then?
— Still working

A. Congratulations on your early retirement.

These are excellent questions to consider, especially when retiring at such a young age.

When you retire young, there are some potential trade-offs that you must be willing to make, said Michael Cohen, a retirement specialist with Certainty Retirement Advisors in Belvidere.

He said the biggest concern is typically healthcare.

Medicare does not kick in until age 65 so you will be responsible for health coverage unless you have other circumstances, he said.

Now let’s go over how Social Security works.

The earliest age at which you can collect is 62. Your current full retirement age in terms of Social Security is 67, Cohen said, and the longest you can wait to collect is age 70.

Do not make the mistake of waiting past age 70 as it provides no benefit to you, he said.

You can check with Social Security to see your estimated benefits.

It will show the amount you are expected to receive at age 67, or your full retirement age, and it will also show estimated benefits at age 62 and 70.

“If you wait until age 70, you will earn 8% simple interest per year on your payment for each year you wait, meaning you can increase your monthly benefit by 24% by waiting until age 70,” Cohen said.

Now let’s look at how your early retirement comes into play.

Social Security determines your benefit amount by looking back on your work history.

“They look at your top 35 years of earnings, then adjust those numbers for inflation to determine what your benefit will be,” he said. “There is a complex mathematical formula that the government uses here to determine your primary insurance amount or full-retirement age benefit.”

To see your statement, which includes estimated benefits and your work history, as long as you have a valid Social Security number, go to and set up an online account.

The numbers you find on your statement are estimates and are subject to change, he said.

Because you will no longer be earning between 52 and when you collect, your estimated Social Security benefit will almost certainly reduce over time, Cohen said. That’s because the estimated benefits on your statement are made with the assumption that you continue to work until age 62, 67 or 70, and continue to earn a similar income to the previous year.

If you stop working at 52, that changes everything because you are no longer contributing to Social Security.

Cohens said it is going to be tough to determine today what your benefit will be at age 67 or 70 for several reasons.

“Your early retirement is a big factor, but in addition, changes are certainly coming to Social Security,” he said.

Indeed, your statement says: “Your estimated benefits are based on current law. Congress has made changes to the law in the past and can do so at any time. The law governing benefit amounts may change because, by 2035, the payroll taxes collected will be enough to pay only about 79 percent of scheduled benefits.”

So what does this mean for your Social Security benefit?

“It means that you should expect changes before or around the time you are thinking about collecting,” he said.

Cohen said it’s unlikely that the government would slash benefits across the nation by 21%, but other action is more likely.

For example, it could change when full retirement age starts, Cohen said. Indeed, it used to be 65, then went to 66 and now, for anyone born in 1960 or after, full retirement age is 67, he said.

It could increase the payroll tax, which is currently 6.2% for W-2 employees and 12.4% for self-employed persons.

It could reduce the 8% simple interest credit to a lesser number or eliminate cost of living adjustments each year, he said.

“The point is they have a lot of options and they will have to act because Social Security is not going anywhere,” he said. “All of these factors make determining your future benefit quite difficult when there is such a large gap of potentially 18 years between retirement date and when you begin collecting.”

Email your questions to .

This story was originally published on Nov. 16, 2021. presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.