Chartered Retirement Planning Counselor (CRPC) Practice Exam 2025 – Comprehensive All-in-One Guide for Exam Success!

When a worker decides to claim Social Security benefits before reaching their full retirement age, their primary insurance amount (PIA) is permanently reduced. This reduction occurs because benefits are designed to reflect the total amount the worker would have received if they had waited until their full retirement age to begin receiving benefits.

The decrease in benefits is based on the number of months the worker claims early. For each month that a worker collects benefits before their full retirement age, a specific percentage is deducted from their PIA. As a result, this reduction not only lowers the amount received during the early claiming period but also establishes a new, permanently lower benefit amount for the duration of the worker's retirement.

Understanding this rule is important for retirement planning, as it significantly impacts the total benefits a retiree will receive over their lifetime. Claiming benefits early can provide immediate income but at the cost of a lower monthly benefit throughout retirement.