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The Impact on Your Social Security Benefits in Early, Full, or Late Retirement

Lauren Le-Hair Updated: August 27, 2023 • 5 min read
senior citizen retirement benefits

Retirement is a milestone many of us look forward to, but deciding when to retire can be a complex decision. Your choice to retire early, on time, or late can significantly impact your Social Security benefits. In this article, we'll explore the effects of these three retirement options on your Social Security benefits, providing insights and information to help you make an informed decision for a secure and comfortable retirement.

Calculating your full retirement age (FRA) can be confusing, as you are entitled to different social security amounts at different ages. In the US, full retirement age varies between 65 and 67, depending on the year you were born:

  • 1960 or later: Your full retirement age is 67.
  • 1959: 66 and 10 months
  • 1958: 66 and 8 months
  • 1957: 66 and 6 months
  • 1956: 66 and 4 months
  • 1955: 66 and 2 months
  • 1954 or earlier: You've already hit full retirement age.

Haven't hit the full retirement age yet? You can obtain some social security retirement benefits earlier. Keep reading this in-depth social security definition economics guide to explore your options.

How does social security work?

You may be wondering, “How does social security work?” The term refers to a US federal program run by the Social Security Administration (SSA) that offers retirement benefits to qualified individuals. As you work, you pay into social security with each paycheck, and that money is then distributed to senior citizens at retirement age.

Keep in mind that the social security amount you receive is unlikely to cover your total monthly expenses. The average monthly benefit for a retired worker in the United States in 2023 is $1,827. So while it isn't likely to replace all of your pre-retirement income, it may help you maintain a basic standard of living during retirement.


Early Retirement Age

You are eligible for early social security retirement benefits from the age of 62, but accessing your retirement benefits at this age comes with several pitfalls. If you choose to receive your retirement benefits before reaching the full retirement age of 67, it will permanently reduce your monthly benefit. More specifically, accessing your retirement benefit at 62 means you will receive 30% less monthly benefit than you’d be entitled to if you waited until full retirement age at 67. If you choose this route, make sure to do your research and estimate the amount of money you'll receive, and how much it will aid your standard of living.

Another important consideration when deciding whether to take early retirement is the impact that it has on your other benefits, especially Medicare, the government-funded national health insurance for those ages 65 and older. People that take early retirement benefits before they are entitled to Medicare have to pay more for Medicare premiums, and we all know that paying for healthcare can get pricey, especially as you age.

Still, early retirement can be a great option if you are aged between 62 and 67 and need extra cash. Yet, you’ll need to keep in mind that there are downfalls if you don't wait until the full retirement age to tap your benefits.

retirement age men women

Average Retirement Age by Gender

The average retirement age varies by gender alongside several other factors, including income and level of education. Historically, the average retirement age for men has always been slightly higher than the average retirement age for women. Still, as time passes, the average age for both genders is getting older and older. The table below shows how the average retirement age has increased.

Year Average male retirement age Average female retirement age
1992 62 59
2001 63 60
2010 64 62
2016 65 63
2021 65 62


Reasons for the difference historically include the inequality of pay between genders, differing levels of career opportunities, and differing life expectancy. As we see social issues such as pay inequality tackled, we can expect the age gap between genders to narrow. However, as life expectancy increases, we anticipate the retirement age for both males and females to continue to grow over the coming years.

Average Retirement Age by State

There isn’t just a difference in retirement age by gender – there is an even more significant variance in the average retirement age state by state. Unsurprisingly, US states that are the most expensive to live in, such as California and New Hampshire, have an older average retirement age, as the average person can’t afford to retire early. On the flip side, West Virginia has the youngest average retirement age at 61. The table below shows the average retirement age for every state in the US.

State Average Retirement Age
Alabama 62
Alaska 61
Arizona 63
Arkansas 62
California 64
Colorado 65
Connecticut 65
Delaware 63
District of Columbia 67
Florida 64
Georgia 63
Hawaii 66
Idaho 64
Illinois 64
Indiana 63
Iowa 65
Kansas 65
Kentucky 62
Louisiana 62
Maine 63
Maryland 65
Massachusetts 66
Michigan 62
Minnesota 65
Mississippi 63
Missouri 63
Montana 64
Nebraska 65
Nevada 63
New Hampshire 65
New Jersey 65
New Mexico 62
New York 64
North Carolina 63
North Dakota 65
Ohio 63
Oklahoma 62
Oregon 63
Pennsylvania 64
Rhode Island 65
South Carolina 63
South Dakota 66
Tennessee 64
Texas 65
Utah 65
Vermont 65
Virginia 65
Washington 64
West Virginia 61
Wisconsin 64
Wyoming 64


Full Retirement Age

The full retirement age represents the age at which you can claim your full retirement benefits without having a deduction applied. Over the years, the full retirement age has increased as life expectancy has increased. For example, in 1982, men’s full retirement age was 65 and women’s was 60. Yet, by 2023, the age has increased to 67 for both genders.

While you can access your social security retirement funds before reaching the full retirement age, it isn’t until you hit 67 years old that you can access these funds in full. Ultimately, the decision of when to access your retirement funds requires careful planning and is different in every case. However, the general consensus is that if you can afford to wait under full retirement age to access your funds, it is worth doing so to realize their full value.

retirement age life expectancy

Late Retirement Age

Some people are in a fortunate financial position where they do not need to access their retirement funds at 67, for example if they are still able to work, have successful businesses or investments, or are financially supported by family. If you find yourself in this position, you can choose not to take your social security retirement benefits when you reach full retirement age.

You may be wondering why you'd ever choose to delay cashing in on such a crucial source of income. Well, the same social security calculations formula that deducts your retirement benefit if you retire before 67 will increase your social security payments if you retire after 67. So, if you can afford to wait to cash in your retirement until you reach the age of 70, your social security benefits will be 24% larger than if you’d taken them at the age of 67.

As we have mentioned, when to take your social security benefits will depend entirely on your individual circumstances. Yet the economic benefits can be substantial if you can afford to wait until past full retirement age.

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Retirement planning can be complex at the end of the day, but the most important thing to remember is to plan to your specific needs. Sure, if you are in a position where you don’t need the cash right now, it may be better to wait until full retirement age (or longer) to access your social security retirement funds.

However, it isn’t wrong to access your retirement funds early if you need the funds. Hopefully, this guide will have given you a better understanding of how social security works, so if you are in this position, you can make the most informed decision possible.

Written by Lauren Le-Hair linkedin-icon

As an experienced content writer, Lauren's passion for the finance sector is only exceeded by her love of writing. With years of experience writing for financial websites, she has honed her expertise and developed a deep understanding of the industry. Lauren specializes in delivering top-quality, specialized content with an expert tone of voice and a unique flair, leveraging her extensive knowledge and expertise. In addition, she holds a First Class Bachelor's degree from Staffordshire University.