What would Peggy's approximate monthly early retirement benefit be if her normal Social Security retirement benefit at age 65 is $1000?

To determine Peggy's approximate monthly early retirement benefit, it's important to understand how Social Security calculates early retirement benefits. If an individual chooses to retire before reaching their full retirement age, which is typically around 66 or 67 depending on their birth year, their monthly benefits are reduced.

The standard reduction is about 5/9 of 1% for each month prior to their full retirement age, up to 36 months. If Peggy's full benefit at age 65 is $1000, retiring early would mean she opts for a benefit reduction.

Assuming Peggy is retiring at age 62, which is the earliest age you can claim Social Security retirement benefits, she would face a reduction calculated based on the number of months until she reaches 65. For example, retiring three years early (36 months) would lead to a significant reduction.

Calculating this reduction, if we approximate at 6.67% per year of early retirement (which is 5/9 of 1% for the first 36 months), the reduction from $1000 might bring her benefit to around $800.

Thus, the calculation would confirm that if her normal Social Security retirement benefit at age 65 is $1000, her early