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Planning to retire early? Here's help
Pittsburgh Post-Gazette


August 23, 2006

If you're counting on retiring early, you're going to want to look closely at your annual Social Security statements. What you see may shock you.

The statements estimate how much your monthly benefit checks will be reduced if you decide to start collecting before your full retirement age, and the drop-off can be sizable depending on your age.

You can retire any time between age 62 and your "normal" retirement age - which ranges from 65 to 67, depending on the year you were born - and still collect benefits.




But the penalty for cashing in early can be stiff.

The hits for retiring at age 62 range from 25 percent for people born in 1944 to 1954 to 30 percent for people born in 1960 or later.

An individual planning to retire this year at age 62 (born in 1944), for example, who is set to collect a monthly benefit of $1,000 at the full retirement age of 66, would see that check cut to $750. Someone born after 1960 would see benefits slashed to $700.

The penalty softens each month that you delay taking benefits. The same 62-year-old would collect $867 by waiting until age 64 to retire.

People who wait beyond their normal retirement age earn credits toward a fatter payout. Today's 62-year-old who holds out until age 70 would collect $1,320 a month compared with the $1,000 he would get at normal retirement age.

Benefits stop growing at age 70, so there is no advantage to waiting longer than that.

The Social Security Administration's Web site offers numerous charts and online calculators to help you estimate the impact of retiring early. The site can offer a more accurate and detailed look than your annual Social Security statement.

You can go to the benefits reduction chart at Click the year you were born for a detailed analysis.

The site also can give you a more precise estimate of your benefit at full retirement by allowing you to plug in projected increases in your annual salary. Social Security statements base your projected payout on current and past earnings, but don't take into account any raises.

To get to the calculator page, go to, then click "Calculate Your Benefits." The tool allows you to estimate your benefit based on today's dollars, or to adjust it upward by factoring in projected cost-of-living increases between now and your retirement date.

The Social Security office says you shouldn't fret too much if you are trying to decide whether it's better to take your Social Security check early, or to wait for a bigger payout at your normal retirement date.

Considering average life expectancies, early retirement generally gives you about the same total Social Security benefits over your lifetime as waiting would, Social Security spokeswoman Dorothy Clark said.

Purely on a numbers basis, people who have shorter-than-average life spans benefit the most from collecting early.

If you want to get an idea of how long you would have to live before the decision to postpone benefits starts to pay off, try the administration's "Break-Even Age" calculator at

The administration also has a toll-free phone line to help answer questions at 800-772-1213.


Patricia Sabatini can be reached at psabatini(at)
Distributed to subscribers for publication by
Scripps Howard News Service,

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Ketchikan, Alaska