Retirees Could Lose Thousands With This Common Social Security Mistake

Social Security can be claimed starting at age 62, but claiming before full retirement age reduces monthly benefits. Full retirement age is 67 for people born in 1960 or later. Filing early may appear attractive because it provides money sooner and can improve cash flow before potential future program changes. However, early filing carries a lasting financial cost. For example, a benefit of $2,000 per month at 67 becomes about 30% lower when claimed at 62, reducing monthly payments by $600. Over time, the cumulative loss can be substantial, with lifetime losses estimated at about $45,600 if benefits are claimed at 62 and the person lives to 85, and about $81,600 if the person lives to 90.

"You're allowed to claim Social Security at any point once you turn 62. But if you don't wait to file until full retirement age (FRA), which is 67 for anyone born in 1960 or later, your monthly benefits will be reduced."

"Let's say you're eligible for $2,000 a month in Social Security at 67, but you file at 62 instead. That means you're looking at a 30% reduction, or $600 less per month and $7,200 less per year."

"Let's say you live until age 85. At that point, you're looking at giving up about $45,600 in lifetime Social Security by claiming benefits at age 62 instead of waiting until 67."

"And the numbers get worse the older you get. If you end up living until 90, claiming Social Security at 62 versus 67 means losing out on $81,600."

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