Does quitting at 63 affect my Social Security?

  @Money October 16, 2013: 4:18 PM ET
What's your dream retirement?
NEW YORK (Money Magazine)

Say I want to start collecting Social Security at age 66. If I retire at 63, will my not working cut my benefit? -- Chuck Witte, Wheatland, Wyo.

A Social Security benefits are based on your 35 years of highest earnings. Have you worked at least that long? Then quitting at 63 probably won't have a major impact, says Jonathan Peterson, author of Social Security for Dummies.

To illustrate, let's say that you make $100,000 at age 63, having received 3% raises annually over a 35-year career. Hanging in for three more years would raise your monthly benefit $41, or 1.6%.

Related: Planning for retirement

If, however, you're making the same money but have worked only 32 years, quitting early would hurt more; you'd be forgoing $119 a month, or a 4.8% bump, by not putting in three more years. You can test scenarios yourself at ssa.gov.

Related: The Social Security mistake that costs retirees thousands To top of page

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Have you saved $1 million or more in your 401(k)? We want to hear your secrets! Email Melanie.hicken@turner.com and you could be featured in an upcoming story.


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