You may begin collecting retirement benefits from Social Security as early as age 62 or as late as age 70, depending on when you were born. When you reach your regular retirement age, sometimes referred to as your "full retirement age," the Social Security Administration states that you are eligible to receive your full benefits.
Full Retirement Age
The complete retirement age for those born after 1937 is anywhere from 65 to 67 years old, depending on the year in which they were born. The full retirement age of 65 applies to those who reached their birthday between 1937 and 1942. If you were born after 1942, your eligibility age for retirement is either 66 or 67 years old. If you were born on January 1, the year you were born would be used to calculate the age at which you are eligible for full retirement benefits.
Receiving Social Security Benefits Early
Your monthly benefits might be lowered by as much as thirty percent if you begin collecting Social Security benefits at the age of 62. As you get closer to your full retirement age, your benefits will begin to grow annually; once you reach that age, you will begin receiving the entire amount.
If you begin receiving Social Security benefits after the age of 62 but before the age at which you are eligible for full retirement benefits, the reduction in your benefits will be less severe. Your Social Security payout will be reduced by .56% for each month you draw benefits before you reach your full retirement age, for a maximum of 36 months. You will be subject to an extra monthly loss of 0.42% of your pension benefits if you retire more than 36 months before you reach your full retirement age.
Waiting to Receive Social Security Benefits
Put off starting your Social Security benefits until after you have reached your full retirement age. You will be eligible for benefit credits that will increase the amount you will eventually get. However, after you reach the age of 70, that raise is no longer valid.
For instance, if your full retirement age is 67 and you choose to delay getting your benefits until you are 70 years old, you will receive an annual increase of 8%. This will continue until you reach age 70. However, even if you wait to start collecting benefits, you must apply for Medicare before you become 65 years old. When you are first eligible to enroll, you will have the opportunity to begin the procedure.
This period lasts for 7 months, beginning 3 months before month in which you turn 65, continuing through month in which you turn 65, and ending 3 months following your 65th birthday. There may be possibilities for you to enroll in Medicare Part B at a later date even if you missed your first enrollment period or choose not to enroll in Medicare Part B because you have coverage via employment or a spouse's plan.
How Does Work Affect Social Security Benefits?
It is possible to obtain Social Security benefits while still maintaining employment, and beneficiaries are eligible to begin receiving payments at age 62 regardless of whether or not they continue to be employed. However, if you begin collecting benefits before you reach the age at which you are eligible for full retirement, your benefits will be temporarily reduced by one dollar for every two dollars you earn in 2021, more than $18,960.
If you continue to work during the year you reach your full retirement age; you will have one dollar deducted from your benefits for every three dollars in additional earnings above a higher limit ($50,520 in 2021). However, this reduction will only apply to earnings made before the month in which you reach your full retirement age.
When Should You Start Social Security?
SSA does not provide a suggested age to begin collecting benefits, but they do not have a minimum age requirement. You have complete control over the outcome of the choice. If you begin the program earlier, you will get a smaller benefit, but if you wait until you are 70, you will receive a larger reward. On the SSA website, you'll find a calculator to help you determine the difference.
You may get a larger payment throughout your lifetime if you wait, but it is possible that this is not as essential as obtaining cash right now, particularly if you are unable to work due to health concerns. In the end, the ideal age is determined by factors such as one's health, level of employment, and available resources.
