Why taking Social Security early costs too much

Starting Social Security early typically means getting a smaller benefit for the rest of your life. The penalty is steep: Someone who applies this year at age 62 would see their monthly benefit check reduced by nearly 30%.

Many Americans have little choice but to accept the diminished payments. Even before the pandemic, about half of retirees said they quit working earlier than they’d planned, often due to job loss or health issues. Some have enough retirement savings to delay claiming Social Security, but many don’t. And now, with unemployment approaching Depression-era levels, claiming early may be the best of bad options for older people who can’t find a job. In my latest for the Associated Press, why it pays to wait with Social Security.

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Comments

  1. Herman cortez says

    I retired at age 55. My job didn’t require me or my employer to pay into social security. I worked a part time job just long enough to pay into social security to cover the missing social security credits. Now that I am 65 I had enough credits to cover and join Medicare. My question is, when would be a good time to apply for social security payments? Provided I qualify for any payments at all.

    • Liz Weston says

      If you’re getting a pension from that job, your Social Security benefit will be reduced but not eliminated. Free Social Security claiming calculators typically can’t factor in government pensions, but you can use a more sophisticated calculator such as MaximizeMySocialSecurity.com or Social Security Solutions to figure out the best timing.