Social Security replaces a percentage of your earnings when you retire. Your benefits are based on your lifetime earnings. Choosing your retirement date is one of the most important decisions you will ever make. If you decide to retire when you reach full retirement age, you will receive your full benefits. However, if you retire before reaching full retirement age, you will receive reduced benefits.
full retirement age
If you were born before 1942, you are already entitled to full Social Security benefits. If you were born between the years of 1943 through 1960, the age at which full benefits are payable began to gradually increase until you reach age 67.
delayed retirement
If you decide to delay receiving benefits until after your full retirement age, your benefit will increase by a certain percentage, depending on the year you were born. The increase will be added automatically from the time you reach full retirement age until you start receiving benefits or reach age 70, whichever comes first. If he was born in 1940, for example, his benefit would increase 7 percent for each year between his full retirement age and age 70 that he does not receive retirement benefits.
Early retirement
You can start receiving benefits as soon as you turn 62. However, if you start receiving your benefits at a young age, your benefits will be reduced. Your benefits are reduced by approximately one-half of one percent for each month you receive benefits before reaching your full retirement age. For example, if your full retirement age is 66 and you apply for Social Security benefits at 62, you will only receive 75 percent of your full benefit.
If you work and receive benefits
You can continue to work and still receive retirement benefits. Your earnings in (or after) the month you reach your full retirement age will not reduce your Social Security benefits. In fact, working past your full retirement age can increase your benefits. However, your benefits will be reduced if your earnings exceed certain limits in the months before you reach full retirement age.
If you work but start receiving your benefits before your full retirement age, $1 of your benefits is deducted for every $2 of earnings over the annual limit. In 2010, the limit is $14,160.
The year you reach your full retirement age, $1 of your benefits is deducted for every $3 of earnings over a different annual limit ($37,680 in 2010) through the month you reach your full retirement age.
Once you reach your full retirement age, you will be able to continue working and your Social Security benefit will not be reduced no matter how much you earn.
Explanatory Note: People who work and receive disability benefits or Supplemental Security Income payments are affected by different earnings rules. They must report all of their earnings to Social Security right away, no matter how much they earn.
Retirement benefits for widows and widowers
If you receive widow’s or widower’s benefits, you can apply to receive your own retirement benefits as soon as you turn 62, assuming the amount of your own retirement benefit is greater than the amount you receive on your spouse’s earnings record. passed away. In many cases, you can start receiving one benefit at a reduced rate and then switch to the other benefit at a full rate once you reach full retirement age. The rules are complicated and vary depending on your situation. For this reason, we recommend that you speak with a Social Security agent about the options available to you.
