What is the consequence of filing for Social Security benefits early?

Filing for Social Security benefits early results in a permanent reduction of those benefits. When individuals choose to start receiving their Social Security retirement benefits before reaching their full retirement age, they are essentially opting for a lower monthly payment. The reduction in benefits is calculated based on the number of months a person is receiving benefits before reaching their full retirement age, and this reduction is permanent — meaning that the individual will receive a lower amount for the rest of their life.

The decision to file early can have significant financial implications, especially for those who may rely heavily on this income during retirement. Understanding this consequence highlights the importance of considering both immediate financial needs and long-term financial security when deciding when to file for Social Security benefits.