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Deciding whether to retire at age 64 or wait until 67 can significantly affect your social security benefits. Generally, the longer you wait, the more you will be able to collect. However, there are limits, and you will also have to consider your lifestyle, healthcare and life expectancy to determine whether you should retire early or not.
A financial advisor can help you create a plan to retire early, while delaying your Social Security to maximize benefits.
General Factors to Determine Your Retirement Age
Deciding to retire at age 64 or 67 involves weighing your financial needs and lifestyle preferences. Retiring early at 64 can lead to reduced Social Security benefits, a gap in healthcare coverage and possibly increased long-term costs. Waiting until 67, however, could increase your monthly Social Security benefits and give you more time to grow your retirement savings, although it requires working three additional years, which may not be feasible.
Social Security Benefits
Social Security benefits are based on a retiree’s highest 35 years of earnings and their retirement age. Retiring before full retirement age results in a permanent reduction in monthly benefits. At 64, retirees will see a reduction of about 25%. At 67, retirees receive their full benefit with no reductions thus increasing their lifetime payments.
If you can afford to wait even longer, retiring at 70 maximizes your benefits thanks to delayed retirement credits that increase your payments by about 8% each year past full retirement age. And, if you have a spouse who is eligible for benefits, don’t forget to coordinate with them so that you can maximize your household income.
Earning Potential
Social Security has an earnings limit for those who claim benefits before the full retirement age (67 for most people). As of 2025, if an early retiree earns more than $23,400, their benefits are reduced by $1 for every $2 earned over the limit. At 67, retirees can work without any reductions, making it easier to supplement their income. So, if you expect to earn significant wages while collecting benefits, delaying until 67 can help you to avoid reductions.
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About This Calculator
To estimate how much you may need to save for retirement, we begin by calculating how much you're expected to spend over the course of your retirement. This includes estimating the income you'll need based on your lifestyle preferences, then factoring in how many years you may spend in retirement. We assume a lifespan of 95 by default, though you can adjust it after your calculation is complete.
Once we have a clearer view of your total retirement needs, we use our models to evaluate your existing and future resources. This includes estimating retirement income from Social Security and the impact of current retirement plans, pensions and other accounts. For additional inputs and a comprehensive retirement plan, please see our full Retirement Calculator.
Assumptions
Lifespan: We assume you will live to 95. We stop the analysis there, regardless of your spouse's age.
Retirement accounts: We automatically distribute your future savings optimally among different retirement accounts. We assume that the IRS contribution limits for your retirement accounts increase with inflation.
Social Security: We estimate your Social Security income using your stated annual income and assuming you have worked and paid Social Security taxes for 35 years prior to retirement. Our estimate is sensitive to penalties for early retirement and credits for delaying claiming Social Security benefits.
Return on savings: We assume the percentage return on your savings differs by whether you're pre- or post-retirement and by account type, with a distinction between investment accounts and savings accounts. This assumption does not account for market volatility or investment losses and assumes positive growth over time. All investing involves risk, including the possible loss of principal.
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This is not an offer to buy or sell any security or interest. All investing involves risk, including loss of principal. Working with an adviser may come with potential downsides such as payment of fees (which will reduce returns). Past performance is not a guarantee of future results. There are no guarantees that working with an adviser will yield positive returns. The existence of a fiduciary duty does not prevent the rise of potential conflicts of interest.
Healthcare Coverage and Medicare Eligibility
Medicare eligibility begins at age 65. Retiring at 64 means managing a one-year health insurance gap. You could rely on a spouse’s policy, purchase your own, or pay for COBRA continuing coverage. These options can be expensive. For those with chronic health conditions or medical expenses, it may make more financial sense to wait until you can take full advantage of Medicare.
Other Financial Needs
When deciding between early retirement at 64 or waiting until 67, other financial resources play a factor in your decision. For example, if you paid off your mortgage early, you may find it easier to retire early. Here are five financial things to consider for early retirement:
- Retirement savings: If you have significant savings in 401(k)s, IRAs, or other retirement accounts may afford to retire early more comfortably.
- Pensions: If you receive a pension, then this steady income stream could help you reduce your reliance on Social Security.
- Passive income: Income from investments, rental properties, or other passive income sources can supplement your early retirement and ease financial constraints.
- Low living expenses: If you have modest lifestyles or live in an area with lower costs of living, you may find it easier to retire earlier.
Life Expectancy
Life expectancy is a key factor in choosing when to start receiving Social Security benefits. If you anticipate a longer lifespan, delaying benefits until 67 or beyond can be financially advantageous. But, if you are facing health issues or who have a family history of shorter lifespans, you might find it more beneficial to start receiving benefits at 64.
Your decision can also affect the financial well-being of a surviving spouse. If one spouse waits longer to claim Social Security, it could result in higher survivor benefits after their passing. This consideration is particularly important for couples where one spouse may significantly outlive the other.
How Claiming Early Affects Your Social Security Benefits
If you begin claiming Social Security at age 64, your monthly benefit will be permanently reduced compared to waiting until your full retirement age of 67.
The Social Security Administration reduces benefits by 5/9 of 1% for each month you claim early, up to 36 months. For any additional months beyond that, the reduction increases slightly to 5/12 of 1% per month.
In practical terms, claiming at 64 means your benefits will be about 20% lower for life. Over a 20-year retirement, that social security early retirement penalty can add up to tens of thousands of dollars in lost income.
That said, claiming early has its advantages. It allows you to start drawing benefits sooner and could help preserve your personal savings for a longer period. However, retiring at 64 also means you’ll need to rely more heavily on your own resources, such as investment portfolios, savings accounts, or part-time work, and cover your healthcare costs until Medicare eligibility begins at 65.
If you wait until 67, you’ll lock in a higher monthly benefit and gain three extra years to save, invest and potentially benefit from continued employer contributions.
Bottom Line
Choosing to retire, and claiming Social Security at 64 or waiting until 67, depends on your financial situation, health and lifestyle goals. Retiring at 64 gives you early freedom but reduces your Social Security benefits and requires securing healthcare before Medicare starts. Waiting until 67 boosts your monthly benefits and provides full Medicare access. Given the significant impact on your long-term finances, consulting with a financial advisor can help you plan a retirement that balances your financial needs and lifestyle preferences.
Tips for Retirement Planning
- A financial advisor can help you plan for a comfortable retirement by setting and adjusting different goals. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- If you want to calculate future monthly benefits, SmartAsset’s Social Security calculator can help you get an estimate.
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