The age that you choose to start taking your Social Security benefits is going to determine how much you are going to receive each month. The following shows you how:
Delaying Your Retirement.
If you don’t start receiving your Social Security benefits when you reach the full retirement age, you will be delaying your retirement. The Social Security Administration will continue to add to your benefits until you reach the age of 70. Then, benefits will not be added after that. Therefore, you have no reason not to begin collecting your Social Security benefits by the time you reach the age of 70.
Retiring Early.
The earliest that you can begin to receive your Social Security benefits is at the age of 62. Because you will be receiving your benefits before you reach the full retirement age, Social Security will reduce your benefits accordingly. You can find out how your benefits will be adversely affected by taking an early retirement by visiting the Social Security website.
Retiring at Full Retirement Age.
The full retirement age is the age at which you are allowed to begin receiving your full Social Security benefits. Those born from 1943 to 1954 have a retirement age of 66, and if you were born from 1955 to 1960, your full retirement age is 67. Anyone born after 1960 also has a full retirement age of 67 years.
What If You Continue to Work?
You don’t have to retire at your full retirement age if you don’t choose to do so. If not, your Social Security benefits will continue to increase as you go. Each year that you decide to work beyond the full retirement age will add another year of employment to your Social Security record. Therefore, if you have higher earnings over your lifetime, you will also have higher benefits.
How Do Pensions Factor into Social Security Benefits?
You may not have paid Social Security taxes on a pension that you received from your job. Because you didn’t pay Social Security taxes, your benefits are going to be lowered. This is known as the “Windfall Elimination Provision.” You may be a spouse, widow or widower of someone with a pension from a government job. The pension may be affected by the Government Pension Offset. Lastly, you may be required to pay income tax on your Social Security benefits in some cases.
When Are You Eligible for Social Security benefits?
As you pay Social Security taxes by working, you are earning credits. Those born in 1929 or later will need 40 credits to be eligible for Social Security benefits in the future. In most cases, this means that you have worked for 10 years.
By opening a My Social Security account, you can find out what your estimated benefits will be under several different scenarios. Visit the Social Security website, and open your account today.
