You can claim Social Security retirement benefits as early as age 62. However, claiming early means that your monthly benefit checks and, potentially, your overall lifetime payout amount, will be lower than if you wait until Full Retirement Age for Social Security. Your Full Retirement Age is the age at which you become eligible to receive non-reduced benefits and are no longer subject to the earnings limit if you are still working. In short, Full Retirement Age means full (although not maximum) Social Security.
Full Retirement Age for Social Security
Your full retirement age for Social Security depends on when you were born.
| If you were born in: | Your full retirement age is: |
|---|---|
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
Note: If you were born on January 1 of any given year, use the previous year to determine your full retirement age [1].
Qualifying for Retirement Benefits
When you work and pay Social Security taxes, you earn credits (up to 4 per year). Everyone born after 1928 must attain 40 credits (the equivalent of working for 10 years) in order to qualify for Social Security retirement benefits. You can view your Social Security statement online by setting up a ‘my Social Security’ account.
Estimating Your Benefits
Your Social Security retirement benefit is based on your earnings and years in the workforce. Years of low or no income reduce your entitlement.
When you begin claiming retirement benefits also affects your monthly payment. You can start claiming benefits as early as age 62, or delay benefits up to age 70. The longer you wait to claim, the higher your monthly payment will be. You can estimate your retirement benefits using the benefit calculator.
Delaying Social Security Retirement Benefits
For individuals born in 1959 or earlier, age 66 plus a few months (depending upon the year in which you were born), is your Full Retirement Age for Social Security. For those born in 1960 or beyond, your Full Retirement Age is age 67. However, you don’t have to begin claiming benefits as soon as you reach your Full Retirement Age. Delaying your benefits beyond Full Retirement Age increases your future monthly benefit amount. For every month you delay claiming benefits beyond your Full Retirement Age for Social Security (up to age 70), your benefit permanently increases. For those born in 1943 or later, the increase is approximately 8% annually.
When to Claim Retirement Benefits
When to start receiving Social Security retirement benefits depends upon many personal considerations, including:
- whether you plan to continue working
- your health, family health history, and potential longevity
- various lifestyle considerations
How Work Impacts Retirement Benefits
If you claim early Social Security benefits before Full Retirement Age and continue to work, $1 of benefit will be withheld for every $2 you earn over the annual earnings limit.
A different calculation and higher limit apply in the year that you reach Full Retirement Age for Social Security.
From the month you reach Full Retirement Age, you can work and earn as much as you want without reducing your retirement benefits.
Retirement Benefits for Family Members
If you’re receiving retirement benefits, other family members may also be eligible for benefits. Retirement benefits are paid to family members who were financially reliant on your income. This may include your spouse (even if they never worked outside the home or in a job covered by Social Security), and other family members such as:
- A spouse, 62 or older, married at least 1 year
- A former spouse, aged 62 or older, if you were married at least 10 years
- Your children over 18, if disabled
Eligible family members receive benefits of up to 50% of your benefit. However, there’s a cap on the total monthly family benefit of 150%-180% of your full retirement benefit amount. If the total family benefit exceeds this limit, your benefit will not change, but each family member’s benefit will be reduced proportionately.
How to Sign Up for Social Security
The Social Security Administration recommends contacting them up to a year before you plan on applying for benefits, especially if you have a government pension and may be subject to either a pension offset or windfall elimination provision. You should apply for Social Security benefits several months before your retirement. Call or visit your local Social Security office or complete an online application.
Retirement benefits are the cornerstone of the Social Security program, and a major source of income for most retirees. Our advisors review clients’ Social Security options within the framework of broader personal, wealth, and retirement objectives. Please contact us for more details.
References
[1] https://www.ssa.gov/benefits/retirement/planner/agereduction.html
