Social Security Is Pushing You to Work Longer – Can You Still Afford to Retire Early?

To get your full Social Security benefit, you may have to work longer than you’d like. If you really don’t want to wait to quit work and start taking benefits, you’ll need a plan that compensates for a smaller monthly check.

A man stare straight ahead with a disappointed look on his face.
(Image credit: Getty Images)

Are you thinking of retiring soon? Perhaps earlier than you had planned years ago? A potential hurdle could be the incentives set up by the Social Security Administration – they calculate your benefits to reward you for staying in the workforce.

But if you are looking to take an early retirement, you’re not alone.

In the first 15 months of the COVID pandemic (March 2020-May 2021), about 2.5 million Americans retired. That was about twice the number of people who retired in 2019. This means there were essentially 1.2 million fewer people in the workforce over the age of 55 than would otherwise be expected.

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First, find out what Social Security benefits you can expect

For anyone born in 1943 or later, your full retirement age, as defined by the Social Security Administration, is between age 66 and 67, based on your birth year. If you’re contemplating retiring before that, it’s important to know that the Social Security program has been orchestrated to incentivize beneficiaries to delay claiming benefits. Specifically:

  • If you start taking benefits at age 62, your Retirement Benefit will shrink by 25% to 30%, depending on your birth year. That’s because your lifetime annual benefits are decreased by approximately 8% for each year prior to your full retirement age you start to claim them.
  • Conversely, your lifetime annual benefits increase by 8% for each year past your full retirement year if you delay claiming them – until the month in which you turn age 70, at which time your benefit has grown as large as it can.

The Social Security Administration has created an easy-to-use tool for calculating your reduced estimated annual benefits if you choose to begin claiming your benefits before you reach your full retirement age; using this table, you can also view what you’d gain percentage-wise by postponing retirement.

Next, weigh your retirement security from four different perspectives

These limitations on Social Security benefits are a deterrent for many who want to retire early. But with thoughtful and flexible long-term planning, you may be able to retire when you want.

Here are four important elements you’ll need to consider if you want to have a financially secure retirement – no matter at what age you stop working.

1. Make sure you know precisely what you want.

Start by asking questions like: What does “retiring early” mean to you? Do you have a specific age in mind? Why? What will your lifestyle be like in retirement? Might you relocate to another state or even a different country? Rank your wants in terms of highest to lowest priority so you have a sense of what you’re willing to compromise on.

2. Be aware of trends in increasing longevity.

The average life span in the United States has been trending longer — though this was upended by the pandemic in 2020 and 2021. Between 1950 and 2020, the average American life expectancy increased more than 10 years, according to Macrotrends – from age 68 to nearly 79.

Longevity in the U.S. fell last year, to an average of age 76, according to the CDC. But the trend upward still holds. So, we all need to plan to live longer in retirement – upwards of 30 years perhaps – and avoid outliving our financial means. Doing so requires developing and maintaining a robust investment portfolio that can grow sufficiently and minimize risk and investment-related expenses.

3. Take rising inflation into account.

You’ve undoubtedly noticed the sharp price increases in many goods and services during the past year. Inflation erodes purchasing power: You need to have investments that, at a minimum, keep up with inflation – and ideally generate returns that exceed it.

4. Make sure you have adequate retirement savings outside of Social Security.

Social Security is meant to be a supplemental source of retirement income. It’s critical to have ample additional savings that you can use to fund the life you want in retirement. If available, take advantage of your company’s 401(k) and company match. If not, create an IRA. Taking advantage of compound interest and saving early and often will help you achieve your goals.

Deciding when to retire is a decision not to be rushed or taken lightly. Rest assured though – with the proper planning, you can arrive at the appropriate retirement date.


Halbert Hargrove Global Advisors LLC is an SEC registered investment adviser located in Long Beach, California. Additional information about HH, including our registration status, fees and services can be found at This blog is provided for informational purposes only and should not be construed as personalized investment advice or as a solicitation to offer personal securities transactions. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant.


This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Vincent Birardi, CFP®, AIF®, MBA
Wealth Adviser, Halbert Hargrove

Vincent Birardi is based in Halbert Hargrove’s Long Beach headquarters and brings more than 20 years of experience in financial services to his wealth advisory relationships with clients — along with a passion for identifying solutions that will enable them to fulfill their life goals. What he values most about his role is helping to bring clarity and peace of mind to clients and their families. Prior to joining the firm in 2018, Vincent held management roles with PIMCO and Morgan Stanley. He was awarded the ACCREDITED INVESTMENT FIDUCIARY™ designation by the University of Pittsburgh-affiliated Center for Fiduciary Studies and is a CERTIFIED FINANCIAL PLANNER™ professional.