Early Social Security Withdrawal: Is It Possible?

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Can You Withdraw From Social Security Early?

Social Security retirement benefits can be accessed as early as age 62, but it’s important to understand the implications of early withdrawal. When you start receiving benefits before your normal retirement age, your benefit amount is reduced. The reduction can be as much as 30 percent if you retire at age 62, decreasing your monthly payments. On the other hand, delaying your benefits past your normal retirement age can increase your benefit amount.

Retiring at age 70 allows you to receive your largest benefit. The reduction and increase in benefits follow specific formulas, with reductions applied for each month before the normal retirement age and credits given for retirement after the normal retirement age.

Early Social Security Withdrawal

Key Takeaways:

  • Early Social Security withdrawal is possible at age 62, but it leads to reduced benefits.
  • Retiring at age 70 allows you to receive the largest benefit.
  • The reduction and increase in benefits follow specific formulas.
  • Retiring early can result in penalties and reduced monthly payments.
  • Delaying retirement can increase your monthly Social Security payments.

Related Reading: Maximize your social security benefits

Early Retirement Reduces Benefits

If you are considering early retirement and social security withdrawal, it’s important to understand the consequences and potential reduction in benefits. When you choose to retire early, your social security benefits will be reduced compared to what you would receive if you waited until your normal retirement age.

Age at RetirementReduction in Benefits
62Maximum reduction of 30%
63Maximum reduction of 25%
64Maximum reduction of 20%
65Maximum reduction of 14.3%

It’s important to consider these early withdrawal penalties and reductions in benefits when making the decision to retire early. While early retirement may be appealing, it’s crucial to weigh the financial impact and determine if it aligns with your long-term financial goals.

Helpful Tool: Use our social security calculator to find the amount of benefits you can recieve

Can You Withdraw Money From Social Security Early

Delayed Retirement Increases Benefits

While retiring early may result in a reduction in your monthly Social Security benefits, delaying your retirement and benefits can have the opposite effect. The Social Security system offers delayed retirement credits for individuals who choose to retire after their full retirement age, up until the age of 70.

These delayed retirement credits can significantly increase your monthly benefit amount. However, it is important to note that to receive full credit, you must be insured at your normal retirement age. After the age of 69, no further credits are provided.

Before making any decisions regarding your Social Security benefits, it is crucial to assess the impact of early or delayed retirement on your overall benefits. By calculating the effect of delaying your retirement, you can make a well-informed decision that maximizes your monthly payments.

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Frequently Asked Questions

What are the penalties for withdrawing from Social Security before full retirement age?

Withdrawing from Social Security before reaching full retirement age can result in penalties, which may reduce your monthly benefit amount by up to 30%. The exact penalty amount depends on how early you begin taking benefits.

Does early retirement always result in reduced benefits?

Yes, early retirement generally leads to a reduction in Social Security benefits. However, delaying your retirement past your normal retirement age can result in increased monthly payments.

How does delayed retirement affect Social Security benefits?

Delaying your retirement past your normal retirement age can increase your Social Security benefit amount. The system provides delayed retirement credits for retiring after your normal retirement age, up until age 70.

Is there an age limit for early Social Security withdrawal?

The earliest age to withdraw from Social Security is 62. However, it’s important to consider the implications and reductions in benefits before making a decision.

Shawn Plummer, CRPC

Chartered Retirement Planning Counselor

Shawn Plummer is a Chartered Retirement Planning Counselor, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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