Social Security retirement age
The age that an individual can receive their full retirement benefits from Social Security is the Social Security retirement age. In the past, the full retirement age was set at 65. Changes to the law have gradually increased the full retirement age.
The full retirement age is not the same for everyone. It is based on the year the beneficiary was born. For anyone born before 1938, the full retirement age is still 65. Although, anyone who was born after that, has to wait longer to reach their full retirement age due to the gradual increase of a few months for each birth year after that. In other words, people born in 1960 or after will not reach full retirement age until they are 67.
What is the early retirement age
Although the full retirement age is 65 or older depending on what year you were born, individuals can decide to receive their benefits early. Individuals can receive benefits as early as age 62. However, if they decide to do this, they will receive a reduced benefit amount which will be permanent and can be substantially less than the full benefit amount.
If you want to see an estimate of your Social Security benefits at different retirement ages. go to ssa.gov and create an online account to see what your monthly payment will be.
Click here for a few ideas on what to do when you turn 65
Taking Social Security benefits after full retirement age
Some individuals choose to wait to take their Social Security benefit for years after they reach the full retirement age. This decision can lead to an increase in the monthly benefit amount they receive. For every year delayed past the full retirement age, delayed retirement credits are earned. This results in a higher monthly benefit amount.
Learn about Medicare enrollment periods
Factors to consider
Financial factors
When a beneficiary claims their Social Security benefits can significantly impact their overall retirement income for the rest of their life. Each person has to consider their entire financial situation including, savings, IRAs, 401k accounts and other investments. This will help determine if they take early retirement, full retirement or go past it to receive an increased benefit amount.
Personal health
Individuals need to consider their health and how long they expect to live. Although this may be impossible to know, there are some factors that could help them decide especially if they are in poor health. when that is the case, early retirement may be a good idea. On the other hand, people in good health with a family history of longevity may want to delay retirement benefits.
Employment Status
Individuals who want to work past their full retirement age need to know what that means if they decide to receive Social Security benefits as well as income form employment. Any earned income received while claiming early Social Security benefits can have an impact on the amount of the benefits they receive.
Planning ahead
Evaluate Retirement Goals
Understanding personal retirement goals and financial needs is crucial. Individuals need to be clear about how they expect to live once they retire. Do they plan to travel or downsize their home. What sources of income can they count on? There are many questions that must be considered.
Hire a professional
Meeting with a financial advisor, retirement planners, or Social Security expert may offer unbiased advice and may provide you with insights you may otherwise have not considered.
A few more thoughts
The age you decide to receive Social Security retirement benefits can make a huge difference in the financial well-being of retirees. This decision should not be made without ample consideration.
If you are retiring from your job and taking Social Security benefits, you may need to sign up for Medicare coverage at that time.
Click here to learn about Medicare enrollment SEP rules
Although the age a beneficiary chooses to take Social Security benefits is an important aspect of retirement, there are many other things that come into play for a successful and happy retirement.