What Is the Penalty for Early Social Security Filing for Benefits?
The Social Security Administration reduces that amount of your monthly benefit if you apply for social security benefits before you reach full retirement age.
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Time Frame
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Regardless of your year of birth, you can apply for benefits as soon as you turn 62 years old.
Effects
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The amount of the decrease depends on how early you apply for your social security benefits and the time your full retirement age. For example, if you were born in 1950 and applied for social security benefits when you turned 62, your monthly benefit would be 25 percent lower than if you had waited until your full retirement age.
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Full Retirement Age
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Your full retirement age depends on the year of your birth. For example, if you were born in 1937 or earlier, your full retirement age is 65 years. However, if you were born after 1959, your full retirement age is 67 years.
Other Income
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If you apply for social security before you reach full retirement age, your benefit may be decreased if you have other income. The outside earnings limit before your benefit starts shrinking for 2010 is $14,160.
Considerations
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You should consider whether you have other income and how long you expect to live when you are deciding whether to apply for early social security benefits. If you expect to live into your 80s or 90s, it will usually be worthwhile to wait, because your monthly benefit checks will be larger.
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