As early as age 62, you are eligible to begin receiving Social Security retirement benefits. But once you reach full retirement age, you are eligible for full benefits. Your benefit amount will rise if you wait until you reach full retirement age—that is, until you are 70 years old.
Your benefits are lowered by a tiny percentage for each month that you are younger than the full retirement age if you begin receiving benefits early.
Use the chart below and choose your year of birth to determine how much your benefit will be reduced if you start receiving benefits at age 62 and continue until you reach your full retirement age. Based on a $1000 monthly benefit estimate at full retirement age, this example
Keywords: Social Security, Retirement Benefits, Early Retirement, Delayed Retirement, Benefit Reduction, Full Retirement Age, Delayed Retirement Credits
Navigating the complexities of Social Security benefits can be challenging. This guide aims to provide a comprehensive understanding of how early or late retirement impacts your Social Security benefits, empowering you to make informed decisions about your retirement timeline.
Early Retirement: Reduced Benefits, Longer Payment Period
Choosing to retire before your full retirement age (FRA) comes with a trade-off: reduced benefits for a longer payment period. For each month you retire before your FRA, your benefit will be permanently reduced by a specific percentage. This reduction can be significant, amounting to as much as 30% for those retiring at age 62, compared to their full benefit amount at the FRA.
Example:
- Full Retirement Age: 67
- Monthly Benefit at FRA: $1,500
- Early Retirement Age: 62
- Benefit Reduction: 30%
Monthly Benefit at Age 62: $1,500 x (1 – 0.30) = $1,050
While you would receive benefits for five additional years (from age 62 to 67), you would miss out on $1,050 per month for those five years, totaling $63,000. However, you would also gain an extra $450 per month for life starting at age 67.
Delayed Retirement: Increased Benefits, Shorter Payment Period
Delaying retirement beyond your FRA offers the advantage of increased benefits. You accrue delayed retirement credits for each month you postpone retirement after your FRA, up to age 70. These credits can significantly boost your monthly benefit, potentially outweighing the shorter payment period.
Example:
- Full Retirement Age: 67
- Monthly Benefit at FRA: $1,500
- Delayed Retirement Age: 70
- Delayed Retirement Credit: 8% per year (assuming birth year 1943 or later)
Monthly Benefit at Age 70: $1,500 x (1 + 0.08 x 3) = $1,740
By delaying retirement for three years, you would receive an extra $240 per month for the rest of your life, even though you would receive benefits for three fewer years.
Factors to Consider When Choosing Your Retirement Age
The decision of when to retire involves a careful analysis of various factors beyond just Social Security benefits. Here are some key considerations:
- Financial needs and goals: Determine your monthly expenses and how much income you need to maintain your desired lifestyle in retirement.
- Health and life expectancy: Consider your overall health and life expectancy, as these factors can impact the duration of your retirement and the total amount of benefits you will receive.
- Other sources of income: Evaluate any additional income sources, such as pensions, investments, or part-time work, that will contribute to your financial security in retirement.
- Personal preferences: Assess your desire to continue working, pursue hobbies, or spend more time with family and friends.
Understanding the impact of early or late retirement on your Social Security benefits is crucial for making informed retirement planning decisions. By carefully evaluating your financial needs, health, other income sources, and personal preferences, you can choose the retirement age that best aligns with your overall goals and aspirations.
Full Retirement and Age 62 Benefit By Year Of Birth
| Year of Birth 1. | Full (normal) Retirement Age | Months between age 62 and full retirement age 2. | At Age 62 3. | |||
|---|---|---|---|---|---|---|
| A $1000 retirement benefit would be reduced to | The retirement benefit is reduced by 4. | A $500 spouses benefit would be reduced to | The spouses benefit is reduced by 5. | |||
| 1943-1954 | 66 | 48 | $750 | 25.00% | $350 | 30.00% |
| 1955 | 66 and 2 months | 50 | $741 | 25.83% | $345 | 30.83% |
| 1956 | 66 and 4 months | 52 | $733 | 26.67% | $341 | 31.67% |
| 1957 | 66 and 6 months | 54 | $725 | 27.50% | $337 | 32.50% |
| 1958 | 66 and 8 months | 56 | $716 | 28.33% | $333 | 33.33% |
| 1959 | 66 and 10 months | 58 | $708 | 29.17% | $329 | 34.17% |
| 1960 and later | 67 | 60 | $700 | 30.00% | $325 | 35.00% |
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Social Security at Age 62, 67, 70 | Pros and Cons of Each
FAQ
How much does Social Security increase each year between 62 and 67?
Is it better to collect Social Security at 62 or 67?
What is the average Social Security check at age 67?
What is the maximum Social Security payment at age 67?
How much Social Security benefits do you get if you retire at 62?
However, the Social Security Administration reduces benefits by 30% for people who retire at 62, meaning they receive just 70% of their full retirement benefit each month for life. For people born in 1960 or later, full retirement age is 67. This is the age at which you are entitled to 100% of your Social Security retirement benefit
How much Social Security benefits does a 67 year old get?
According to the most recent data from the Social Security Administration, the average monthly benefit for retired workers at age 67 is $1,844.83. Someone who files for retirement at age 67 typically receives 100% of their full benefit. You plan to continue working while receiving benefits.
Should you claim social security at age 62?
The study found that if you claim Social Security at age 62 rather than waiting until your full retirement age (FRA), you can expect a 30% average reduction in monthly benefits. For every year you delay claiming benefits past your FRA up to age 70, you get an 8% increase in your benefit.
What is the full retirement age for Social Security?
The full retirement age for Social Security ranges from 65 to 67. The SSA decides a person’s full retirement age based on when they were born. Eligibility age: The earliest age at which a person can begin taking Social Security retirement benefits. Typically this is age 62.