6 Moves That Can Make (or Break) Your Early Retirement Before Social Security Kicks In
- - 6 Moves That Can Make (or Break) Your Early Retirement Before Social Security Kicks In
Adam PalascianoNovember 11, 2025 at 3:15 AM
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Your retirement plan doesn't end when you stop working — it begins the moment you step away from full-time employment. Retiring early before you claim Social Security creates a gap between income and benefits that must be managed carefully. That gap, and the decision when to start Social Security, can be the difference between thriving and scrambling in your later years.
Let's walk through the key factors every retiree and near-retiree should evaluate.
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Retiring isn't the same as claiming Social Security
Many people step away from work around age 62, which is the current average retirement age as per the 2024 MassMutual Retirement Happiness Study. However, most retirees don't start Social Security until later — the average age when retirees claim Social Security is 65, according to AARP.
That creates an income gap you must finance with savings, retirement funds, part-time income, or other benefits. Carefully planning for the gap between retirement and claiming benefits ensures your income remains stable during those early years.
Here are some tips and steps you can take to maximize your Social Security benefit before you take it.
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Wait to claim SS to increase your benefit
You can claim Social Security benefits as soon as age 62, but your benefit will be significantly reduced. However, by postponing the start of Social Security benefits past your full retirement age (FRA), age 66 or 67, depending on when you were born, you earn delayed retirement credits. These amount to a roughly 8% increase in your lifetime benefit for each year you delay, up to age 70.
Working beyond your FRA or simply waiting to claim benefits boosts your monthly check permanently. That means retiring early and delaying benefits can work — but only if you have other income to fill the gap.
Work for at least 10 years to qualify for SS benefits
You must earn 40 credits (about 10 years of work) to qualify for Social Security retirement benefits. If you stop working early in life and don't meet that threshold, you risk losing eligibility altogether — so retiring before you've built those years is a serious risk factor.
Work for more years to increase your SS benefit
Your Social Security benefit is based on your highest 35 years of earnings. If you work less than 35 years, each year with no earnings counts as zero in your benefit calculation.
If you retire before you reach 35 years of earnings and you don't replace low-earning years, you may see a lower benefit. Keeping part-time work or consulting for more years could replace those zero years and improve your benefit even if you're "retired" in practice.
Steps you can take to make sure your retirement savings can fill the gap
If you retire before claiming Social Security, your savings must bridge the income gap until you begin benefits. That means mapping out how much you need each year, considering additional income sources, and determining how you'll make withdrawals from your retirement portfolio. You'll also want to build a contingency if markets go south or if health costs spike.
1. Determine how big your gap is and how much you'll need
The first step is estimating your annual retirement expenses and subtracting your combined guaranteed income sources, such as a pension and retirement account withdrawals, which could tide you over before you collect Social Security.
From there, figure out the number of years between retiring and when you expect to claim Social Security, and multiply that figure by your estimated retirement expenses to understand how much income your savings must provide. Be realistic about inflation, medical costs, and any lifestyle changes. The clearer your numbers, the easier it is to build a strong plan.
2. Consider additional income sources
If the gap looks large, part-time income or consulting may help reduce how much you draw from retirement accounts early on. Some retirees leverage rental income or take on part-time gig work or consulting jobs.
Even a modest monthly paycheck can meaningfully extend the longevity of your savings. The goal is to take less from your portfolio during those early years so it has more time to grow.
3. Plan a withdrawal strategy
How you take money from your accounts matters — not just how much. Tax-smart withdrawal strategies, such as taking from taxable accounts first while delaying IRA withdrawals, can help control your tax bill and keep more money working for you over time, depending on your tax bracket.
A well-structured withdrawal plan ensures that your nest egg supports you both before and after your Social Security checks begin.
4. Carefully review your expenses
An early retirement means you may need to dip into your savings sooner than anticipated. Taking a close look at your spending now helps you estimate whether your assets will last through the gap.
Consider paying off your mortgage before retiring, trimming non-essentials expenses, and reducing and eliminating debt to ensure you'll have enough saved to cover your needs each month.
5. Max out your retirement account contributions
If you're still working, make the most of your employer-sponsored 401(k) plan or IRA now before you call it quits at your 9-to-5. For tax year 2025, the annual 401(k) contribution limit is $23,500, and the IRA/Roth IRA limit remains $7,000.
Individuals age 50 or older can also contribute catch-up amounts: an extra $7,500 to 401(k)s and $1,000 to IRAs. These contributions can help build the bridge between retirement and Social Security — and could help reduce taxable income before you retire, depending on the type of account.
6. Open and fund an HSA to cover future medical expenses
Health care costs often increase with age, and if you retire early, you'll have a longer stretch before Medicare kicks in at age 65. An HSA (Health Savings Account) lets you save pre-tax dollars for medical expenses, and if used properly, it acts like a supplemental retirement vehicle.
The money grows tax-free and gives you flexibility to cover unexpected health costs without draining your regular retirement savings. Once you reach age 65, you can no longer contribute to an HSA, but you can use the money you've saved along the way to pay for qualifying medical expenses tax-free. After age 65, you can also use the money for any non-medical expense — you'll just owe regular income tax.
Bottom line
Retiring before you take Social Security doesn't automatically mean you'll be doomed financially in your golden years — but it does raise the stakes on cashflow planning, health-cost buffers, and income sequencing.
Before stopping work, consider whether you've built your savings cushion, mapped out your financial timeline, and have created a smart strategy to support a truly stress-free retirement for years to come.
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Source: “AOL Money”
