What is normal retirement age for purposes of Social Security? The answer to this question depends on your date of birth. Normal retirement age, as defined by the Social Security Administration, operates on a sliding scale system. For example:
- If you were born in 1937 or before, then your normal retirement age is 65.
- For those born after 1960, normal retirement age is 67.
- If you were born in between 1937 and 1960, your normal retirement age is somewhere between age 65 and age 67. You can find out what age applies to you at www.socialsecurity.gov.
Do You Have to Retire at Normal Retirement Age?
The Social Security Administration uses normal retirement age as a baseline for establishing the amount of your monthly benefit. But you don’t have to wait until you reach normal retirement age to start receiving benefits. You can choose to start Social Security benefits beginning at age 62. If you make this choice, though, your monthly benefit amount will be permanently reduced.
On the other hand, you can choose to wait for your Social Security benefits. For each month past normal retirement age that you delay benefits, an additional percentage will be added to your monthly benefit. The amount of Social Security benefits you can receive reaches a cap when you turn 70.
What About Working and Drawing Benefits?
Normal retirement age also comes into play when determining how much income you can earn while collecting benefits. Before you reach normal retirement age, if you earn more than $14,600 per year, then your monthly benefit is reduced by $1 for each $2 that your income exceeds the limit. In the year you reach retirement age, the penalty is reduced, and you’ll only lose $1 in benefits for each $3 you earn over the limit. When you actually reach full retirement age, the penalty is eliminated, and you can earn as much as you want while collecting your full benefit.
Stephen A. Mendel, Estate Planning Attorney
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