You can start collecting Social Security payments at age 62, but you won’t receive the full benefit you have earned unless you wait until your full retirement age to sign up for Social Security.
The Social Security full retirement age varies based on your birth year. Here’s a look at how to determine your full retirement age and what this means for how much you will get from Social Security in retirement.
The Social Security full retirement age is:
— 65 for those born in 1937 and earlier.
— 66 for those born between 1943 and 1954.
— 67 for those born in 1960 or later.
[READ: How Much You Will Get From Social Security.]
Age 65
The full retirement age used to be age 65 for everyone born in 1937 and earlier. After that, the full retirement age increased in two-month increments from 65 and two months for someone born in 1938 to 65 and 10 months for those with a birth year of 1942.
— 1938: 65 and two months.
— 1939: 65 and four months.
— 1940: 65 and six months.
— 1941: 65 and eight months.
— 1942: 65 and 10 months.
Age 66
The Social Security full retirement age is 66 for most baby boomers born between 1943 and 1954. However, for people born in the five years after that the full retirement age again increases in two-month increments each year.
— 1955: 66 and two months.
— 1956: 66 and four months.
— 1957: 66 and six months.
— 1958: 66 and eight months.
— 1959: 66 and 10 months.
Age 67
The full retirement age for Social Security is 67 for everyone born in 1960 or later. You can get a my Social Security account to learn more about your age and benefits.
In addition, you can check to see an estimate of what you’ll receive in benefits. “The amount of Social Security you receive is directly impacted by the number of years you work, the amount you pay into the system and when you start claiming your benefit,” says Matt Calme, a certified financial planner and wealth advisor at HCM Wealth Advisors in Cincinnati.
[See: 10 Strategies to Maximize Social Security.]
Taking Benefits at Different Times
After finding your full retirement age, you can calculate the impact of taking Social Security benefits earlier or later. “The first exercise most people go through is to understand what their benefit amounts are at different ages,” says Raymond J. Lucas, Jr., a financial planner and senior vice president of financial planning and training at Integrated Financial Partners.
If you take Social Security early, your benefit will be temporarily lower. For instance, if your full retirement age is 66 and you claim benefits at age 62, the decision will mean “a 25% reduction in your monthly benefit,” Lucas says.
Another option is to delay Social Security checks. “Once you reach full retirement age, you can decide to wait to claim your benefit up to age 70,” says Chuck Czajka, certified Social Security claiming strategist and founder of Macro Money Concepts in Stuart, Florida.
Each year you wait, your payment will increase by 8% every year until you turn 70. “Keep in mind that this could also be a survivor benefit once you pass,” Czajka says.
[See: 10 Ways to Increase Your Social Security Payments.]
Working and Social Security
If you begin taking benefits before your full retirement age and decide to continue working, it could change your Social Security income.
For individuals who earn less than $21,240 in 2023 and receive Social Security, there will be no reductions to the benefit amount. If you earn more, $1 of benefits will be taken out for every $2 over the threshold.
That means if you earn $25,000 in 2023 and have claimed Social Security early, your benefit will be reduced by $1,880. During the years following your full retirement age, you won’t have benefit deductions based on the amount you earn. If your paychecks were lowered for a period due to your work income, your benefit amount will be recalculated when you reach full retirement age. You’ll get credit for the months the benefit was reduced.
Aligning your work, retirement and income plans is not a small task. “You should never make a Social Security decision just by looking at Social Security in a vacuum,” Lucas says. “It must be looked at in the context of an entire financial plan. Your age, your health, your assets, your other income sources and your family longevity all factor in to deciding when to initiate your Social Security payments.”
More from U.S. News
10 Strategies to Maximize Social Security
How Much You Will Get From Social Security
10 Ways to Increase Your Social Security Payments
What Is the Full Retirement Age for Social Security? originally appeared on usnews.com
Update 05/17/23: This story was published at an earlier date and has been updated with new information.
