Learn About Social Security Retirement Age


Year by year the Social Security retirement age is increasing based on the legislation passed in the year 1983 by the Congress. As per the tradition, the complete benefit age of a person was 65 while early retirement benefits started from age 62. There was 80% permanent reduction of the full benefit amount. Currently one will get the full benefit after 66 years and 6 months if you are born in 1955.

What To Know About Social Security Retirement Age
What To Know About Social Security Retirement Age

For the people born in 1960 or later years, the full benefit age will become 67 years. However, the early retirement benefits will be available from age 62. But there will be a reduction in benefits. When a person reaches the age margin of 67, all the benefits he or she has taken during 62 will get a reduction to 70% from the full benefit. If you are taking your benefit at age 65, then your full benefit will be reduced to 86.7 %.

If someone has delayed retirement, there is a scope for a financial bonus. A person who has reached the Social Security retirement age of 66 years and 2 months in 2017, receives 8% percent higher monthly benefits for every year. These individuals start to collect their benefits when they become 70 years old. So do the benefits increase to 132% of normal retirement age. The benefits will be at least 24% higher for the delay.

Myths On Social Security Retirement Age

1. Best To Start Benefits Early

What To Know About Social Security Retirement Age
What To Know About Social Security Retirement Age

You can collect your early retirement benefits as early as 62 years. Some so-called expert can suggest you opt for that. So, there is two opposing thought about the right time to start taking retirement benefits.

• Even if you don’t need the money to take care of your household finances, you should take the money and invest. If you invest the money in the right way, you can have more money down the years than reaching the Social Security Retirement Age. Currently based on the year you are born, the full retirement age is between 66 years to 67 years.

• Others believe that the benefit available is worth more than taken out for investment. As the theory goes that you can’t get Social Security benefits after a certain period. This is a fear-infused concept that thinks Congress can scale back the benefits for shoring up the system’s funding.

In reality, it is a tough decision about what is the right time to collect Social Security benefits. It actually depends on various factors, and only you can make the call based on your circumstances.

2. Reaching ‘Break-Even’ Age

What To Know About Social Security Retirement Age
What To Know About Social Security Retirement Age

You can get some confident projections from financial advisers like the X is your break-even age for starting with the Social Security benefits. What it means is that whether you take your benefits from early retirement age or full retirement age, the amount will be the same in X years.

But the reality is it is all just the guesswork as the variables are changing constantly. It includes:

-The Inflation rate
-Time value or discount rate of money
-If it’s a worker or spouse (non-working) who will get the benefits.

It is actually impossible to determine when you should take Social Security benefits without seeing thoroughly at your complete situation like taxes, retirement savings from the current amount, longevity, and life insurance.

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