:max_bytes(150000):strip_icc():format(webp)/NumberoftheDay-DRAFT-0e6f6e4d87a74dc7b9803318ef9f532d.jpg)
Elizabeth Guevara / Investopedia
The average monthly benefit for a retired Social Security beneficiary in 2026 will be $2,071.
Social Security benefits vary for each person, depending on a multitude of factors. Americans can start receiving Social Security retirement benefits at 62, but their payments will be reduced if they don’t wait until their full retirement age.
Once they reach the FRA, which varies depending on when a beneficiary is born, they will receive their full benefits. If they wait longer, their benefits will continue to increase until they reach the age of 70.2 For claimants who took out benefits before the FRA and are still working, their benefits will also change depending on how much income they earn in a year.3
US President Donald Trump speaks to members of the media on Air Force One at Joint Base Andrews, Maryland, on Oct. 31.
Benefits are primarily calculated based on the average indexed monthly earnings a worker earned over a maximum of 35 years.4 Generally, the higher their average earnings were, the higher the benefit amount when the worker retires.
Benefit Amounts May Not Be Enough
Social Security benefits for 2026 will be 2.8% higher than this year, or about $56 more every month for the average retired worker.1 However, even this boost will not be enough to keep up with rising expenses, said the majority of Social Security beneficiaries in a recent AARP survey.
The annual cost-of-living adjustment is calculated using an inflation index from the third quarter of the prior year. Many Social Security advocates, however, have said the formula used does not accurately reflect seniors’ expenses.
Social Security: Why Claiming Benefits at 62 Isn’t a Stupid Idea
Key Points
-
Age 62 is the earliest age to sign up for Social Security.
-
If your full retirement age is 67, filing at 62 will mean slashing your benefits by 30% for life.
-
If Social Security is extra money for you and nothing more, then you might as well take benefits when they can do the most for you.
-
The $23,760 Social Security bonus most retirees completely overlook ›
-
There are certain financial decisions in the context of retirement that are pretty easy to make. For example, the decision to enroll in Medicare may not be so difficult if you don’t have better health coverage through a job when you turn 65.
But claiming Social Security is a tough decision, and for good reason. While the program’s benefits formula takes your 35 highest-paid years of wages into account when calculating your monthly payments, your filing age determines whether you get your monthly benefits in full, or at a reduced or boosted rate.
-
Image source: Getty Images. Full retirement age for Social Security is 67 for anyone born in 1960 or later. The earliest age to claim Social Security, meanwhile, is 62.
If you file for Social Security at 62 with a full retirement age of 67, you’ll slash your monthly benefits by 30% — for life. On the flip side, if you delay your Social Security claim past full retirement age, for each year you do, until you reach age 70, your monthly benefits get a permanent 8% boost.
-
Because claiming Social Security at 62 results in such a drastic reduction, you might assume that it’s unwise to file that early. But actually, under the right circumstances, it can be a very smart decision.
It’s a matter of how much you need your benefits
A lot of people reach retirement age without having accumulated much of a nest egg. People without a robust IRA or 401(k) plan balance often have to rely on Social Security to cover most of their bills.
In that situation, it’s generally not a great idea to claim Social Security ahead of full retirement age if you don’t have to. If your retirement savings will only provide you with a small amount of income, you may not be able to afford a reduced monthly benefit for life.
-
On the other hand, some people save well all their lives and end up with a large IRA or 401(k) balance by the time retirement rolls around — a large-enough balance to easily cover all of their expenses without a need for extra money. If you’re in a situation like that, then claiming Social Security at 62 is not a poor choice at all.
As people get older, their health and mobility tend to decline. So if you’re in good health at age 62 and your Social Security benefits represent extra money you can use for your own enjoyment, then you may want to sign up at a time when they can do more for you.
This isn’t to say that if you’re in great shape at 62, you’re guaranteed to be in a lot worse shape by 67. Rather, it’s that if you know you’re in good shape to enjoy your Social Security benefits at 62 and you can afford a reduction, you may want to grab that money immediately rather than run the risk of not getting to enjoy it as much later on.
Imagine you’ve always wanted to hike internationally. If you’re in proper shape to take those big trips at 62, waiting could mean losing out on the opportunity. So if your Social Security benefits are really just extra money and you have a meaningful use for that money at 62, you may want to sign up as early as possible.
Either way, think through your choice carefully
The decision to claim Social Security is a big one, whether you have a lot of retirement savings or you’re approaching your senior years with a minimal IRA or 401(k) balance. It’s important to take the time to understand your options and calculate the difference in monthly payouts across various filing ages.
Remember, it’s not as if your only choice is to claim Social Security at 62 versus 67, or 67 versus 70. You may decide that it makes sense to sign up for benefits at 63, or 64 and a half.
The point, however, is that signing up for Social Security as early as possible isn’t automatically a bad decision. It could, depending on your circumstances, end up being a very wise choice.
The $23,760 Social Security bonus most retirees completely overlook
If you’re like most Americans, you’re a few years (or more) behind on your retirement savings. But a handful of little-known “Social Security secrets” could help ensure a boost in your retirement income.
One easy trick could pay you as much as $23,760 more… each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we’re all after. Join Stock Advisor to learn more about these strategies.
