As most people know, Social Security benefits are reduced when claimed before full retirement age (FRA). But did you know that there are three different formulas to calculate the reductions depending on the kind of Social Security benefits? Also, there are two sets of calculations based upon the total number of months that one is claiming early?
Of course, you can always contact the Social Security Administration for your exact benefit in any particular month and year you elect to claim, but who wants to wait on hold for that long?
Claiming your own Social Security benefit early has the following reduction factors:
0.55% reduction for the first 36 months
0.42% reduction for months 37+
The Spouse/Divorced Spouse Social Security benefit has the following early reductions:
0.69% reduction for the first 36 months
0.42% reduction for months 37+
Finally, if you take a Survivor Social Security benefit before FRA the reduction factor depends on the year the survivor was born, It ranges from 0.48% reduction for those born 1939 or earlier down to a 0.34% reduction for those born in 1962. There is a sliding scale in between.
Leave it to the Social Security Administration to make it more complex than it needs to be.
If you have questions about claiming your Social Security benefit early, please contact me.
