What do the numbers 61, 65 and 73 have in common? You might guess they are the home run records set during various Major League Baseball seasons by Roger Maris (1961), Mark McGwire (1999) and Barry Bonds (2001) respectively. However, for our purposes here those numbers represent peoples ages. Specifically, the age they may be looking at to mark the beginning of their retirement. In fact, we could also put in numbers like 55, 50 or even younger as even people at those ages are asking could I or should I retire early.
Let’s just get this out of the way right at the beginning…clearly a person can retire at any age they choose. However, to receive full financial benefits from the Social Security Agency will require a person to work until a certain age (based on when they were born). For example, I was born after 1960, so full retirement age for me isn’t until age 67 according to the Social Security website.
I could begin to receive benefits as early as age 62. However, those benefits would come to me at a reduced rate. The calculation used by Social Security is based on the number of months once I retire until full retirement age is reached. In my case that would be 60 months if I retired at age 62.
Retiring early at age 62 sounds great. However, it would really cost me. It would turn a potential $1,000 benefit into only $700, a 30% reduction. $300 dollars a month would go a long way. The Social Security website has a great chart showing all the ages and reduction percentages.
So the choice to retire early isn’t a no brainer. In fact, there are many other things to account for aside from the financial considerations.