Forced Into Early Retirement? Here's What You Should Know Before Claiming Social Security Early

Most people look forward to retirement, but being forced to retire unexpectedly can take a lot of the fun out of it. It happens more often than you might think. Maybe your employer lays you off, and you can't find a new job, or you have to care for a spouse who's unwell.

If you don't have the savings you'd hoped to have before you quit the workforce, you might be considering claiming Social Security early. That is one possibility, but it's important to understand the trade-offs before you apply.

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What happens when you claim Social Security early?

Claiming Social Security early means applying for benefits under your full retirement age (FRA). This is 67 if you were born in 1960 or later. Every month you receive checks under this age shrinks your benefit, and claiming as soon as you become eligible at 62 could reduce your checks by 30%.

This loss is generally permanent, and for some, it can lead to a smaller lifetime benefit. This could force you to rely more on personal savings or income from other sources to cover your retirement costs.

If you have other means of covering your expenses and you expect to live at least until your 80s, delaying Social Security is often a wiser move. You'll have to go without benefits for a few years, but when you apply, each check will be bigger.

If you're unable to pay your bills without Social Security, claiming early is likely the better choice. You may get a smaller lifetime benefit, but your monthly checks can help you stay on top of your bills so you don't fall into debt.

You may have other options

If you're not comfortable shrinking your Social Security checks, you may want to look into other ways to make ends meet after leaving your job. You could try to find other employment if you're still able to work. If your schedule is tight, part-time or remote work might be a better fit for you than a full-time job.

You could also try delaying Social Security for a short time, maybe a few months, rather than waiting years to apply. This will give you a permanent benefit boost and reduce some of the pressure on your personal savings.

Create a my Social Security account to view estimates of your Social Security benefit at every claiming age. This can help you decide how long to wait before applying. It's best to start the sign-up process a few months before you want the checks to arrive, so you don't run into delays if you're missing documents. Contact the Social Security Administration if you have questions about what you need.

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