How do I calculate the benefit reduction if I choose to claim Social Security retirement benefits at age 62 in California?

To calculate your benefit reduction for claiming Social Security at age 62, you must determine your full retirement age and then apply a fixed percentage reduction. The exact reduction amount depends on your birth year, but it is a permanent decrease in your monthly benefit. Here is how to calculate your reduced benefit: Step 1: Determine Your Full Retirement Age (FRA) Your FRA is based on your year of birth and is determined by the Social Security Administration (SSA). For individuals born in 1960 or later, the FRA is 67. For those born between 1955 and 1959, the FRA is between 66 and 67. You can find your specific FRA on the SSA's website, ssa.gov. Step 2: Find Your Full Retirement Benefit Amount Log in to your "my Social Security" account on the SSA website to view your Social Security Statement. This statement shows your estimated monthly benefit amount if you wait until your FRA to claim. This is your starting number, often called the Primary Insurance Amount (PIA). Step 3: Calculate the Total Reduction Percentage The reduction for claiming at age 62 is fixed based on your FRA. If your FRA is 67, your benefit will be reduced by 30%. If your FRA is 66, the reduction is 25%. The reduction is calculated as 5/9 of 1% for each of the first 36 months before FRA, plus 5/12 of 1% for each additional month. Step 4: Calculate Your Reduced Monthly Benefit Multiply your full retirement benefit amount (from Step 2) by the reduction percentage (from Step 3) to find the dollar amount of the reduction. Then, subtract that amount from your full benefit. For example, if your full benefit is $2,000 and your FRA is 67, the reduction is 30% ($600). Your estimated benefit at age 62 would be $1,400 per month ($2,000 - $600). Important details and nuances: Social Security is a federal program, so these calculation rules are the same nationwide and are not specific to California. However, California is one of the states that does not impose a state income tax on Social Security benefits. This reduction is permanent and will not increase once you reach your full retirement age. Warnings and limitations: If you claim benefits before your full retirement age and continue to work, your benefits may be temporarily reduced further if your earnings exceed the annual limit set by the SSA. This "earnings test" no longer applies once you reach your FRA. The benefit amounts on your SSA statement are estimates and can change based on your future earnings. This is general information and does not constitute legal advice. For complex situations, such as those involving disability or spousal benefits, you should consult with a qualified attorney.