What Age Do You Have to Be to Start Collecting Social Security Retirement?
Two factors determine how much a retired worker will receive as a retirement stipend from the Social Security Administration (SSA): the average of a person's 35 years of highest earned income and the age at which a person chooses to begin receiving Social Security retirement benefits. Whether a person retires before or after his normal or full retirement age, as defined by the SSA, also determines how much he will be able to earn during his retirement years without reducing his Social Security retirement benefits.
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Full Retirement Age
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For people born during or before 1937, full retirement age is 65. For people born during or between 1938 and 1959, the SSA incrementally increases its definition of full retirement age. For instance, someone born in 1938 reaches full retirement age at 65 and two months while a person born in 1956 reaches the SSA's benchmark at age 66 and four months. The SSA identifies 67 as the full retirement age for people born during or after 1960.
Early Retirement
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Regardless of a person's full retirement age, he may begin receiving SSA retirement payments as early as age 62. Deciding to begin receiving benefits before reaching full retirement age reduces the amount of money a person will receive from the SSA. The SSA estimates that an individual who chooses to begin receiving benefits at age 62 may face a 30 percent reduction compared to the amount he would have received if payments began when full retirement age had been reached. Benefits are reduced when taken early because the SSA anticipates the recipient will receive payments for a longer period of time than if payments had begun later or at full retirement age. The closer an individual is to his full retirement age when he begins receiving payments, the less his SSA benefits will be reduced.
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Delayed Retirement
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For a person who delays receiving SSA retirement benefits until he is older than his full retirement age, the SSA increases the amount of retirement pay he will receive based on a percentage determined by the person's date of birth. If a person born in 1934 opts to delay receiving SSA benefits beyond his full age, his benefit will increase 11/24 of 1 percent for every month he waits or 5.5 percent for each year payments are delayed. Comparatively, someone born in or after 1943 would receive an increase of 2/3 of 1 percent for every month or 8 percent for every year payments are delayed. Benefit increases cease when a person reaches age 70.
Income Limits
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A person who works while receiving SSA retirement payments may earn up to $14,160 in 2011 without suffering a benefit reduction. SSA benefits will be reduced by $1 for every $2 earned above the stated limit. A person reaching his full age in 2011 may earn up to $37,680 before his birthday without a reduction in SSA benefits. Benefits will be reduced by $1 for every $3 earned above the limit. Earned income will not reduce SSA retirement benefits once a person achieves his full retirement age.
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References
- Social Security Online: Early or Late Retirement?
- Social Security Online: Delayed Retirement Credits
- Social Security Online: You Can Work and Get Social Security at the Same Time
- Social Security Online: Age to Receive Full Social Security Retirement Benefits
- Social Security Online: Frequently Asked Retirement Questions
- Social Security Online: Retirement Benefits
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