Turning 65 marks a cascade of retirement milestones. For example, Medicare eligibility begins, and employer health insurance often ends. And for many Americans, filing for Social Security at 65 feels like a natural transition.
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But that decision can have expensive, permanent consequences. Three retirees shared how claiming at 65 without understanding the rules cost them thousands of dollars they could have used.
Sandra’s Mistake: I Thought Everyone Retired at 65
Sandra, now 69, filed for Social Security as soon as she retired. Like many people, she believed 65 was the standard full retirement age.
“I thought 65 was the number everyone used,” she said. “I had no idea there was a difference.”
But Sandra’s full retirement age (FRA) was 66 and 4 months. Because she claimed early, her monthly benefit was reduced by about 8.9%. If her full benefit were $2,000 a month, she’d now get about $180 less each month.
Over a 20-year retirement, that adds up to more than $43,000 in missed income. FRA varies based on your birth year, and filing even a few months before that number means locking in smaller checks.
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James’ Mistake: I Overlooked How My Decision Would Affect My Spouse
James, 76, claimed at 65 because he had budgeted for the reduced income and didn’t see a reason to wait. What he didn’t think about was how that would affect his wife.
“I just wanted to collect what I earned, and the checks were enough to cover what I needed,” he said. “I didn’t think about what would happen to her benefit if I died first.”
As the higher earner, his benefit amount would determine her survivor benefit after his death. If James had waited until 70, his benefit would have been larger.
Linda’s Mistake: I Didn’t Understand the Earnings Test
Linda, 68, retired from full-time work at 65 and picked up some consulting on the side because she wasn’t ready to stop working completely. She also filed for Social Security, thinking the extra income would help.
“Nobody told me they’d take money back,” she said. “I thought once I claimed, the checks would just keep coming.”
Since Linda had not yet reached her FRA when she started claiming Social Security, her part-time income triggered the earnings test. The Social Security Administration withheld several months’ worth of payments. She’ll get back those lost benefits later, but in the meantime, it created financial stress she hadn’t anticipated.
The Real Cost of Rushing To Claim
Each of these retirees made a different mistake, but they all shared a common assumption: that filing at 65 is the default, no-questions-asked option. In reality, Social Security is one of the few retirement decisions you can’t easily undo.
There’s a narrow 12-month window to withdraw your application, and you have to repay every dollar you’ve received.
What To Do Before You File
Take these steps before you file for Social Security at 65:
- Confirm your full retirement age on the Social Security Administration’s website.
- Compare the long-term impact of filing before you reach FRA.
- Discuss filing strategies with your spouse.
- Learn how the earnings test could affect your benefits if you plan to work.
For most Americans, Social Security is a major piece of the retirement puzzle. Filing at 65 isn’t the wrong decision, but doing it without a plan can cost more than you realize.
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This article originally appeared on GOBankingRates.com: I Retired at 65: This Was My Biggest Mistake With Social Security
