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Your Social Security retirement age

You probably know that the longer you wait to take Social Security, the more you'll get each month. But is waiting worth it for you?

Answers to your Social Security questions

Social Security is like a big pension plan that covers most U.S. citizens who have worked during their lifetimes, as well as their spouses (including widowed and former spouses).

The amount of your benefits depends on the number of years you (or your spouse) worked and the amount of Social Security taxes you paid during your career, which is based on how much you earned each year.

Payment amounts are generally adjusted for inflation, so their purchasing power will remain fairly constant throughout your retirement. Social Security provides a baseline of guaranteed retirement income that helps many people meet their essential expenses.

How timing affects Social Security retirement benefits

You'll probably qualify to collect Social Security income as early as age 62. The age that the federal government considers to be your full retirement age (FRA), though, depends on when you were born.

What's your full retirement age?


BIRTH YEAR

1943–1954

FULL RETIREMENT AGE

66


BIRTH YEAR

1955

FULL RETIREMENT AGE

66 and 2 months


BIRTH YEAR

1956

FULL RETIREMENT AGE

66 and 4 months


BIRTH YEAR

1957

FULL RETIREMENT AGE

66 and 6 months


BIRTH YEAR

1958

FULL RETIREMENT AGE

66 and 8 months


BIRTH YEAR

1959

FULL RETIREMENT AGE

66 and 10 months


BIRTH YEAR

1960 and after

FULL RETIREMENT AGE

67

If you start collecting Social Security before your FRA, your benefits will be reduced by about 6% each year. So, for example, if your FRA is 67 but you begin taking benefits at age 62, you'll lose about 30% of the monthly benefit you're owed.

When should I start collecting Social Security benefits?

The bottom line is that the "best" age for you to begin collecting depends on how long you think you'll live, your marital status, and whether you're concerned about running out of resources during your lifetime (longevity risk).

If you start taking Social Security as soon as you're qualified, the higher number of payments you'll receive means you'll collect more money than someone who waits to file—until you reach a tipping point.

As the table below shows, the tipping point in this example comes shortly before age 80, when someone who had waited until age 67 to collect Social Security would "catch up" to you thanks to his or her higher monthly amount.

If you start collecting early, the reduction in your benefits will be permanent. So if you live longer than age 80, you'll receive less in total Social Security payments than you would have by waiting until your FRA. But if you don't reach age 80, you'll receive a higher total amount of Social Security by collecting earlier.

If you think you'll live long enough, the best strategy could be waiting until you reach age 70 to start collecting. That's because your monthly benefit amount will continue to increase for several years past your FRA as a result of delayed retirement credits—credits you receive for delaying benefits beyond your FRA. These increases are generally adjusted for inflation.

In this example, by the time you're about age 83, you'd collect the highest total amount by waiting.

Total payments by age 75


AGE YOU START

62 (earliest possible)

MONTHLY PAYMENT

$1,750

TOTAL PAYMENTS

$273,000


AGE YOU START

67 (full retirement age)

MONTHLY PAYMENT

$2,500

TOTAL PAYMENTS

$240,000


AGE YOU START

70 (latest possible)

MONTHLY PAYMENT

$3,100

TOTAL PAYMENTS

$186,000

Total payments by age 80


AGE YOU START

62 (earliest possible)

MONTHLY PAYMENT

$1,750

TOTAL PAYMENTS

$378,000


AGE YOU START

67 (full retirement age)

MONTHLY PAYMENT

$2,500

TOTAL PAYMENTS

$390,000


AGE YOU START

70 (latest possible)

MONTHLY PAYMENT

$3,100

TOTAL PAYMENTS

$372,000

Total payments by age 85


AGE YOU START

62 (earliest possible)

MONTHLY PAYMENT

$1,750

TOTAL PAYMENTS

$483,000


AGE YOU START

67 (full retirement age)

MONTHLY PAYMENT

$2,500

TOTAL PAYMENTS

$540,000


AGE YOU START

70 (latest possible)

MONTHLY PAYMENT

$3,100

TOTAL PAYMENTS

$558,000

Based on a hypothetical monthly benefit of $2,500 at FRA, assuming no inflation adjustments. Age 62 is the earliest age to start collecting Social Security; waiting until age 70 to collect allows claimants to earn the most delayed retirement credits.

How much Social Security will I get?

The easiest way to get details on your Social Security eligibility is by going to the Social Security website. While you're there, you can also check whether the information that the Social Security Administration has about you is correct. Or you can review the estimate that the SSA mails you every year once you reach age 60. (Before age 60, you'll receive an estimate every 5 years.)

What if my payment isn't enough to cover my expenses?

Getting a higher Social Security payment is as simple as waiting to file for your benefits. For each year you delay taking Social Security beyond your FRA (until age 70), you'll receive a payment that's about 8% higher. So if you qualify at age 67 for a $2,500 benefit, you could instead receive about $3,100 a month by waiting until age 70 to start.

What else could affect my benefit amount?

  • You may owe income taxes on your Social Security payments if your benefit income is high enough.
  • Applying for Social Security before you reach FRA and then continuing to work could also cause you to lose some of your monthly payments. The Social Security benefits withheld as a result of earned income limitations will be restored when you reach FRA.

How continuing to work will affect your payments


If you continue working while collecting benefits and you won't reach FRA this year

THE AMOUNT YOUR BENEFITS COULD BE CUT—BUT NOT LOST

$1 of Social Security benefits is withheld for every $2 earned above the limit amount.

LIMIT AMOUNT (IN 2016)

$15,720


If you continue working while collecting benefits and you'll reach FRA this year

THE AMOUNT YOUR BENEFITS COULD BE CUT—BUT NOT LOST

$1 of Social Security benefits is withheld for every $3 you earn over the limit amount during the months before you reach FRA. (You can earn any amount after that with no withholding.)

LIMIT AMOUNT (IN 2016)

$41,880


Earnings include wages, self-employment income, commissions, and bonuses earned for the current year. They don't include investment earnings, pensions, and distributions from retirement plans. Dollar amounts are generally indexed for inflation annually. Once you reach FRA, the SSA will recalculate your benefits to account for any months in which your payments were reduced.

What strategies can I use to maximize my benefits?

"Restricted application"

If you and your spouse both worked, you qualify for benefits based on your own earnings and your spouse's earnings. The SSA will calculate which benefits give you a higher payment.

Some people initially file only for spousal benefits and delay their own retirement benefits until later (up to age 70) to take advantage of delayed retirement credits. This is called a "restricted application."

Then, when they reach age 70, for example, they file for their own benefits instead. You can do this only if you filed for spousal benefits at your FRA or later. Otherwise, you won't be allowed to switch.

The Bipartisan Budget Act of 2015, signed into law on November 2, 2015, eliminates this strategy. Some retirees are grandfathered into this rule if they reached age 62 by the end of December 2015 (that is, if they were born before January 2, 1954). If they did, they may claim the restricted application upon reaching their FRA, as long as the other spouse either has begun to collect his or her own benefits or has filed and suspended his or her own benefits by April 29, 2016.

If you've already filed for a restricted application, the new Social Security rules don't apply to you.

"File and suspend"

If you file a restricted application, your spouse must file for benefits before you can receive spousal benefits. But your spouse can file for benefits and then immediately suspend them (while you continue collecting spousal benefits). This is known as the "file and suspend" strategy.

The Bipartisan Budget Act of 2015 eliminates this strategy for future retirees. Some retirees are grandfathered if they meet certain requirements, such as reaching FRA by April 29, 2016 (called the effective date) and filing the election with the SSA by that date.

If you've already applied to use the "file and suspend" strategy, the new rules don't apply to you.

"Reset benefits"

Even if you've already started collecting your own benefits, you can use the "reset benefits" strategy and request what's essentially a "do over." This applies only if you've filed for and received benefits within the last 12 months.

When you make this request, you'll have to pay back (interest-free) any benefits you and your family members have already received. Then the SSA will recalculate your benefits as if you'd never filed.

This strategy could work for you if you claimed benefits early but didn't really need them and now wish you'd waited. But you can only do it once in your lifetime.

On the other hand, if you filed for your Social Security benefits early but more than 12 months ago, you may still be able to suspend your benefits upon reaching FRA. This strategy would allow you to delay your benefits from your FRA until as late as age 70 and increase those benefits with delayed retirement credits. Retirees who returned to work later in retirement or who have begun receiving pension payouts might consider using this strategy, also called the "start, stop, start" strategy.

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