Will Social Security estimator assume I'm working until FRA even if I retire early?

No, the estimator doesn't work that way! When you enter a retirement date before your FRA, it definitely does NOT assume you keep working until 67. It calculates your benefits based on what you've earned so far PLUS what you would earn if you continue working at roughly your current salary level UNTIL the early retirement date you specified (age 63 in your case). After that, it assumes zero earnings. The reduction in benefits you're seeing is just from taking it early - you lose about 5/9 of 1% for each month before your FRA (up to 36 months early) and 5/12 of 1% for each additional month beyond that.

The SSA calculator has different settings that might be confusing you. The Quick Calculator assumes you'll continue earning at your current level until the retirement age you select. The Detailed Calculator and Online Calculator have more options where you can specify future earnings yourself. If you want a truly accurate estimate based on stopping work at 63, you should use your my Social Security account and adjust your future earnings to $0 for the years after you plan to stop working. This will give you the most accurate picture of your reduced benefit amount.

this literally confused me sooo much too when i was helping my dad figure out his ss benefits last year!! the number kept changing depending on which calculator we used. totally frustrating. we finally just went to the local ssa office and talked to someone in person who explained it all

I actually worked with a financial advisor who explained this to me. The SSA calculators are using your earnings record to date, then projecting forward based on your recent average earnings until the age you specify for retirement. At that point, it assumes $0 earnings going forward. One thing people miss though - even if you stop working at 63, you could still choose to DELAY CLAIMING until later (even up to 70) which would increase your benefit amount. Working and claiming are two separate decisions. Working longer adds to your earnings record, while delaying claiming increases your benefit percentage regardless of whether you're working.

Haha I spent HOURS on this exact same thing last month! My take: the SSA site is confusing, the calculators are confusing, and nobody speaks plain English about it. For what it's worth, when I finally got a straight answer, it was exactly what the first response said - the basic calculator assumes your current income continues until whatever age you put in. If you want something more accurate, you need to use the detailed one and put in zeros for future years.

The SSA website calculators are frustrating to use with all these hidden assumptions! I got fed up with trying to reach someone at SSA about this exact issue - was on hold for over 2 hours! Finally used Claimyr (claimyr.com) to get through to an actual person at SSA in under 20 minutes. They have this system that basically calls SSA for you and alerts you when an agent is on the line. Their video demo shows how it works: https://youtu.be/Z-BRbJw3puU. The agent I spoke with explained exactly how the calculations work and helped me input the correct future earnings estimates for my specific situation.

btw has anyone noticed the calculators are wildly different sometimes?? the quick one told me one number and the detailed one was like $300 less per month! made me paranoid about which one is right lol

Another important factor to consider is that your benefit amount is based on your highest 35 years of earnings (adjusted for inflation). If you stop working at 63 but don't have 35 years of earnings, the SSA will use zeros for the missing years when calculating your benefit. This can significantly reduce your monthly payment. Make sure you have a complete earnings record of 35 years before deciding to retire early.