The earliest age at which a person may choose to begin receiving retirement benefits from the Social Security Administration is 62. If a person decides to begin receiving SSA benefits early, at age 62 instead of at his later, full retirement age, the SSA reduces his payments to reflect the longer period of time over which he will receive them. In addition to reduced payments, the SSA limits the amount of income recipients who begin collecting at 62 can receive before the SSA makes further reductions to the benefits.
Full Retirement Age
Age 67 represents the SSA’s definition of full retirement age for individuals born during or after 1960. Full retirement age for people born during or before 1937 is 65. For individuals born before 1960 and after 1937, the SSA identifies full retirement age incrementally between ages 65 and 67, depending on the year of a person’s birth.
If an individual has a full retirement age of 67 but chooses to begin receiving SSA retirement benefits at 62, he will face an approximate 30 percent payment reduction compared to what he would have received at 67. If the same person had waited until age 65 to start receiving benefits, he would have a lesser comparative reduction of 13 1/3 percent. The closer a person is to his full retirement age when retirement benefits begin, the less the SSA reduces his payments.
Earned Income at Age 62
A person who begins receiving SSA retirement benefits in 2011 at age 62 may earn up to $14,160 or $1,180 per month without incurring a reduction of his retirement benefits. Income earned above the SSA’s limit will result in a $1 reduction for every $2 earned above $14,160.
The SSA limit pertains to each of the years during which an individual works while collecting retirement benefits before achieving his full retirement age.
A person collecting SSA retirement benefits may be gainfully employed on either a full-time or part-time basis.
Earned Income at Full Retirement Age
If an individual chose to begin receiving SSA retirement benefits early and achieves his full retirement age in 2011, he may earn up to $37,680 before his birthday without suffering a reduction of his SSA payments. Assuming the person’s birthday is September 1st, this figure translates into $4,710 per month. After September, the same person could earn any amount without affecting his retirement payments.
If an individual exceeds the SSA’s limit before reaching his full retirement age, the SSA reduces his benefits by $1 for every $3 earned above $37,680.
Earned Income After Full Retirement Age
The SSA does not limit the amount of earned income a person may collect once he has surpassed his full retirement age, meaning the person may earn any amount of money and not incur a reduction of his SSA retirement payments.