Claiming your benefits before full retirement age could be a big mistake. Your retirement benefits are reduced for life, and your survivor benefits for a spouse are also reduced. You are eligible for Social Security retirement or spousal benefits starting at age sixty-two.

If you were born before 1954, your full retirement age is sixty-six.

If you were born between 1955 and 1959, add two months after your birthday to determine your full retirement age. In other words, if you were born in 1955 you’d add two months to your birthday. If you were born in 1956, you’d add four months to your birthday. If you were born in 1959, your full retirement age would be ten months after your birthday. If you were born in 1960 or later, your full retirement age is sixty-seven.

Waiting to collect your Social Security benefits even one or two years after age sixty-two can pay big dividends. The reduction in benefits is about 6 percent per year between age sixty-two and full retirement age. At sixty-two, your reduction is about 25 percent if you collect as soon as you’re eligible and your full retirement age is sixty-six. At sixty-four, the reduction is only about 13 percent, so it makes sense to wait as long as you can before taking your benefits. Ideally, you’ll wait until you reach full retirement age, or longer. The chart below breaks the data down for you.

Let’s put this all in perspective. In the introduction, we said the average individual monthly Social Security check in 2017 was $1,360, or $16,320 per year. If your full retirement age is sixty-six and you wait until then to collect, you’d receive that $16,320 if you were an average earner. If you take your benefits at sixty-two, you’ll lose 25 percent of that annual benefit for life, or a whopping $4,080 per year! Considering that half of us rely on Social Security for 50 percent of our retirement income you can see that losing benefits by taking them early will take money out of your pocket. In just ten years, the loss would equal $40,800!