Will Social Security benefits reduce if I stop working at 60 instead of 65?

Your friends giving you the 40 credits info are confusing ELIGIBILITY with BENEFIT AMOUNT. The 40 credits only determines if you can get benefits at all, not how much you'll receive. Your actual benefit is based on your highest 35 earnings years, so yes, adding zeros in there by retiring early could affect your payment. This happened to my sister-in-law and she was really surprised by how much lower her benefit ended up being!

This is a great question and a common point of confusion. Let me explain how it works: Your Social Security retirement benefit is based on your highest 35 years of earnings throughout your career (adjusted for inflation). The Social Security Administration takes these earnings and applies a formula to determine your Primary Insurance Amount (PIA), which is your benefit at Full Retirement Age. If you stop working at 60: 1. SSA will still use your highest 35 years to calculate your benefit 2. If you have fewer than 35 years of earnings, zeros will be included in the calculation 3. If those years between 60-65 would have been higher earning years than some already in your 35, replacing those early, lower-earning years, then yes, your benefit would be lower than if you had worked until 65 The 40 credits (or "quarters") only determine eligibility for benefits, not the amount you'll receive. Hope this helps!

i retired at 59 and my ss check is way less than if i kept working. my brother worked until 67 and gets almost $800 more a month than me even tho we had similar jobs. those last high earning years make a BIG difference!!

Everyone's situation is different, but yes, your Social Security benefit could be reduced if you stop working at 60 instead of 65. Here's what's important to understand: SSA calculates your benefit using your highest 35 years of indexed earnings. If your current earnings are higher than your earnings from when you were younger (which is usually the case for most people), then replacing 5 potential high-earning years with zeros could definitely impact your monthly benefit. One option to consider: instead of fully retiring at 60, could you switch to part-time work until your FRA? Even earning less than your current salary would still be better than zeros in the calculation. Also, have you created an account at my.ssa.gov and reviewed your earnings record? The benefit estimator there can show you different scenarios based on when you stop working.

Best thing you can do is talk to an actual SSA representative to get the real facts for YOUR specific situation. I tried calling them for months last year and kept getting disconnected or waiting for 3+ hours. Finally used Claimyr (claimyr.com) to get through - they connected me with an agent in under 20 minutes. There's a video showing how it works here: https://youtu.be/Z-BRbJw3puU. The agent was able to run different retirement scenarios for me showing exactly how much I'd get at different stopping points. Made my decision SO much easier with actual numbers.

I think u should work as long as possible!!! SS benefits r SO LOW compared to ACTUAL COST OF LIVING these days!!! My aunt retired early and REGRETS IT EVERYDAY!!!! The system is RIGGED against early retirement!!!!

To add some actual numbers to this discussion: Each year of zero earnings that replaces a year of good earnings in your 35-year calculation could reduce your monthly benefit by about 1/35th (roughly 2.85%). So if you have 5 years of zeros replacing what would have been higher-earning years, your benefit could be reduced by roughly 14% compared to what it would have been had you continued working at the same income level. However, this is a simplified explanation. The actual calculation involves indexing for inflation and applying specific formulas to different portions of your average indexed monthly earnings (AIME). The reduction might be less dramatic depending on your specific earnings history. This is why checking the benefit estimator on my.ssa.gov with different retirement ages can be so helpful for planning.

My husband and I both retired at 58. We did the math and figured out that even though our SS would be a bit lower, the extra years of freedom were worth more to us than the money! No regrets 7 years later! Life is short - if you can afford to retire earlier, DO IT! The extra money doesn't help if you're too old to enjoy it.

I'm confused about something... I thought SS only counts your last 10 years of work? Is that completely wrong?

Just wanted to add another perspective here - I'm a financial planner and see this situation frequently with clients. One thing that often gets overlooked is that Social Security benefits receive annual cost-of-living adjustments (COLAs), so even a reduced benefit will grow over time with inflation. That said, the reduction from stopping work early can be substantial. I've run calculations for clients where working just 2-3 additional years made a difference of $200-400 per month for life. Over a 20+ year retirement, that adds up to tens of thousands of dollars. My suggestion: before making the final decision, calculate not just the immediate benefit difference, but the cumulative lifetime impact. Also consider your other retirement income sources - if you have substantial 401k/IRA savings, the SS reduction might be less critical than if Social Security will be your primary income source. The my.ssa.gov benefit estimator that others mentioned is definitely your best starting point for getting concrete numbers for your specific situation.

I went through this exact decision 3 years ago! I was 58 and really wanted to retire, but after doing the math on my SSA account, I decided to work part-time until 62 instead. Here's what I learned: even working part-time at a lower salary was much better than having zeros in my calculation. I took a consulting job that paid about 60% of my previous salary, but it kept my earnings record active and helped maintain my benefit level. The key thing is that Social Security indexes your earnings to today's wage levels, so even your lower part-time earnings from age 60-65 might be worth more in the calculation than some of your very early career years from the 1980s or 1990s. I'd strongly recommend running the numbers on my.ssa.gov with different scenarios - full retirement at 60, part-time work until 62, part-time until 65, etc. You might find that even a small amount of earned income during those years makes a meaningful difference in your monthly benefit. Also don't forget that if you do retire completely at 60, you'll need to bridge health insurance until Medicare kicks in at 65. That cost should factor into your decision too!

Another factor to consider is that if you do decide to retire at 60, you won't be able to claim Social Security benefits until 62 anyway (and that would be at a reduced rate compared to your Full Retirement Age). So you'd need 2 years of bridge income from 60-62, then reduced benefits from 62 until your FRA. If you're planning to live off other savings during those early retirement years anyway, it might make sense to at least do some part-time or contract work to avoid the zero earnings years in your calculation. Even earning $20-30k per year would be infinitely better than $0 for the Social Security calculation. I'd also suggest looking into whether your employer offers any phased retirement options - some companies will let you go part-time or become a contractor, which could give you more flexibility while keeping some earnings on your record. The decision ultimately comes down to your total financial picture, but it's great that you're asking these questions now rather than after you've already stopped working!

I'm in a very similar situation - also considering early retirement but worried about the SS impact. Reading through all these responses has been incredibly helpful! One thing I wanted to add based on my research: if you do decide to work part-time during those years, make sure you understand how the annual earnings limit works if you plan to claim benefits before your FRA. For 2024, if you're under FRA, you can earn up to $22,320 without affecting your Social Security benefits (if you're already claiming them). Above that amount, they reduce your benefits by $1 for every $2 you earn over the limit. But the good news is that this reduction isn't permanent - Social Security recalculates your benefit at FRA to account for the months they withheld benefits, so you essentially get that money back in higher monthly payments later. It sounds like you're doing all the right research before making this decision. The my.ssa.gov calculator really is the best tool for seeing exactly how different scenarios would affect your specific situation. Good luck with whatever you decide!

I'm just starting to think about my own retirement planning and this thread has been incredibly educational! As someone newer to understanding Social Security, I had no idea that the calculation was based on your highest 35 years rather than just having the 40 credits. The real-world examples people have shared here are so valuable - hearing about the $800/month difference between siblings, the part-time consulting approach, and even the specific timeline considerations like the 2-year gap between retiring at 60 and being eligible to claim at 62. I think the biggest takeaway for me is that there seem to be a lot more flexible options than just "work full-time until 65" or "retire completely at 60." The idea of phased retirement or part-time work during those bridge years sounds like it could give you some of the freedom of early retirement while still protecting your Social Security calculation. Definitely bookmarking this thread and planning to set up my my.ssa.gov account soon to start running scenarios for my own situation. Thanks to everyone who shared their experiences and expertise!

This has been such an informative discussion! As someone who's been working in HR for over 20 years, I've seen so many employees make retirement decisions without fully understanding the Social Security implications. One additional point I'd like to add: if you're considering the part-time route during those bridge years, don't forget to factor in how it might affect other benefits too. For example, if you're currently maxing out your 401(k) contributions, working part-time might limit your ability to continue those contributions at the same level. On the flip side, some people find that lower earnings during semi-retirement actually help with Roth IRA conversion strategies. Also, Hunter, since you mentioned starting work at 16, you might want to double-check your earnings record on my.ssa.gov for accuracy. I've helped several employees discover missing or incorrect earnings from their early working years that significantly impacted their benefit calculations. Sometimes employers didn't report earnings correctly decades ago, and it's much easier to fix these issues sooner rather than later. The fact that you're asking these questions now shows you're being really smart about your planning. Whatever you decide, you'll be making an informed choice rather than just hoping for the best!

One thing I haven't seen mentioned yet is the impact on spousal benefits. If you're married, your decision to stop working at 60 could also affect your spouse's Social Security options down the road. The higher earner's benefit amount determines the maximum spousal benefit (up to 50% of the higher earner's PIA), and it also affects survivor benefits. If your spouse would be entitled to spousal benefits based on your record, reducing your own benefit by retiring early could have a cascading effect on your household's total Social Security income. Similarly, if something happens to you, your spouse's survivor benefit would be based on your (potentially reduced) benefit amount. This might be another factor to plug into your calculations, especially if Social Security will be a significant income source for both of you in retirement. The my.ssa.gov estimator can help you model some of these scenarios too. Just wanted to add this dimension since retirement planning really needs to consider the whole household picture, not just individual benefits!

I'm really glad you asked this question because it's one of the most misunderstood aspects of Social Security planning! As someone who went through a similar decision process recently, I wanted to share what I learned. The key insight that helped me was realizing that Social Security uses your highest 35 years of indexed earnings - not your last 35 years, and not just whether you have 40 credits. This means if you've been working since 16 and stop at 60, you'll have 44 years total, so SS will take your best 35 years from those 44. However, here's the crucial part: if your earnings have generally increased over your career (which is typical), then your years from 60-65 would likely be among your highest earning years. By retiring at 60, you're potentially replacing 5 high-earning years with zeros, which could significantly reduce your benefit. I'd suggest two steps: 1) Set up your my.ssa.gov account and run the benefit calculator with different retirement ages, and 2) Consider a middle path like part-time or consulting work during those bridge years. Even earning $30-40k annually would be infinitely better than zeros in the calculation. The decision isn't just about Social Security though - factor in health insurance costs, other retirement income, and your overall quality of life goals. Sometimes the peace of mind of early retirement is worth the financial trade-off, but it's important to make that choice with full information. Good luck with your planning!