You can choose to start receiving Social Security retirement benefits at any time between ages 62 and 70. So, how do you know when the time is right? Here’s a short overview of how your benefits are affected by the age at which you begin receiving them.
Social security benefits are calculated based on two elements. The first is your earnings history, and the second is the difference between your “normal retirement age” and the age at which you begin receiving benefits.
Normal Retirement Age
Your normal retirement age is based on the year in which you were born. For those born in 1937 or earlier, normal retirement age is 65. For those born between the years 1938 and 1959, normal retirement age ranges between 65 and 2 months and 66 and 10 months. And, for those born in 1960 or later, normal retirement age is 70.
If you choose to start taking Social Security benefits at your normal retirement age, then you’ll get your full benefit. However, you don’t have to wait until full retirement age to start receiving benefits, nor do you have to start taking Social Security at the moment you reach full retirement age.
Early Benefits
You have the option of taking Social Security retirement benefits beginning when you reach age 62. However, this choice is not without consequences. For each month younger than full retirement age you are when your benefits start, the amount of your benefits will be permanently reduced by a certain percentage.
Delayed Benefits
On the other hand, waiting until you’re older than full retirement age to start collecting Social Security carries privileges. For each month past full retirement age you wait to start taking benefits, your benefits are permanently increased by a certain percentage. Everyone’s benefits are capped when they reach age 70.
To calculate your benefits at different potential retirement ages, you can use the Social Security Administration’s benefits calculator.
Stephen A. Mendel, Estate Planning Attorney
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