I think calculations have been over simplified.
By retiring early, you have to consider the income lost by not working as well as what SS pays.
In my case, I was born in '43, so my "full retirement" age is 66.
For my age group, if I went out at 62, I lose my working income and I also fail to earn SS credit for 4 years of work, the time I would have worked if I had stayed until 66. And if I worked 40 years instead of 44 years, that's a 10% difference in working years, generally peak earning years, so those 4 years alone might make a 15% difference in the SS check.
So let's say I make $50K at my job. Referring to the chart at
Early or delayed retirement, I would make 75% of my full amount if I quit at 62. I also lose $200K of income I would have made during those 4 years between 62 & 66.
Let's assume I quit at 62 and to keep things simple, assume I would have made $1,000 per month on SS at full retirement. From age 62 on I would make just $9,000 per year on SS, or $126,000 by age 75. If I work until 66, SS would pay $12,000 per year and my income from age 62 until 75 would be $320,000. If I worked until 66 and lived off investments, waiting until 70 to draw SS, my income would be $15,840 per year and I would make $345,000 from age 62 until 75.
And if I didn't croak until the end of my 80th year, the totals would be $171,000, $380.000 and $424,240.
The lesson is, be sure you count everything before you decide. Plus,do you have everything paid off, will you need a new vehicle in the next few years, how much do you make now vs. what retirement will pay, SS & others. And if you have some other retirement system, is it safe?
Figure Medicare is going to cost more (a lot more, probably), make sure you have a nest egg. And figure SS benefits won't hold steady--there is talk in Washington about changing the cost of living formula that would cut the increases by about 1/2 percent per year. Do not count on government promises as government promises are made by politicians.
Full disclosure: I took early retirement from the gov't at age 49 since the Forest Service became afraid to cut trees any more & without a timber program I couldn't justify my job & it probably would have been eliminated anyway. I get a civil service retirement check, greatly reduced from what I would have gotten had I gone until I had 30 years in. My planned alternative didn't work out, but the Air Guard came thru a few years later but there is mandatory retirement from there at age 60. As a civil service retiree, the gov't will take about $300 per month off the top of my SS check when I start to draw that.
Regarding government promises, when I went to work for the gov't, if I had earned SS credit in the private sector, I was supposed to get SS just like everyone else who had earned it, which I did by working in the private sector for 19 years. But in the '80's, they changed the law for CS employees to take $300 per month off the top of the SS check unless you worked 30 years in the private sector. So I get 19 years credit for my working time minus $300 per month. When the country called and I went into the service during the Vietnam war, we were told we would get SS credit for our military time, even though we didn't pay into the system. In the '80's, they said "oh, by the way, we changed our mind" and to get credit for the military time and also draw CS retirement, we would have to pay into the system what we would have paid if the military had not been exempt from SS. That came to about $2,000. And they also said if we retired from the military we and our dependents would get free health care for life. They reneged on that one too.
Government promises are politician's promises.
Some will say, hey he shouldn't complain, he'll be a triple dipper. Yeah, I'll be a triple dipper when I draw SS, but none of them are very big checks--early CS retirement, most of the military time was part time and private sector work was only 19 years and they steal $300 off the top of that. And I earned every dollar, working full time for the Forest Service, full time and part time with the military and we had a business all at the same time. 23 years Forest Service, 23 years military and 19 years private sector, some overlapping (that's 65 working years and I'm 68!).
