As a Social Security disability law office we strictly deal with Social Security disability cases, but we also have to have a handle on non-disability related issues that impact Social Security. As is the case with Social Security disability, there are a lot of rules and regulations people should be aware of when it comes to the Social Security Old Age Survivors Insurance (OASI) program, or otherwise known as Social Security retirement.
Social Security retirement is an important safety net for most Americans. We have heard for years that Social Security is in danger of being depleted and some younger Americans worry that Social Security won’t be around any longer when they retire. Although this is a real concern, typically the president and congress eventually figure out how to sustain the program, so there should be optimism that Social Security will continue to be around for future generations.
Assuming Social Security isn’t going anywhere, it is important to understand that Americans have options of when they want to start receiving Social Security retirement based on their age and financial circumstances. The most important thing to remember when it comes to options is that the longer you wait to begin collecting Social Security, the higher your payments will be. Below, we take a look at how Social Security benefits are impacted depending on at which age a person chooses to start collecting.
- Age 62: The earliest anyone can start collecting Social Security retirement benefits is age 62, but it’s also the lowest monthly amount retirees will receive if they begin collecting at this age. For everyone born 1960 and later Social Security considers the full retirement age to be 67, so we are going to focus on this group of people. For all the people born before 1960 the full retirement age is somewhere between 65 and 67 depending on the year and month a person is born. These people do not face as much of a penalty for collecting Social Security retirement earlier. Those with a full retirement age of 67 would see a 30 percent decrease in full retirement benefits if they decided to collect benefits at age 62. As an example, the average full retirement amount in 2016 is $1,341. A 30 percent reduction at age 62 would result in about $939 per month.
- Age 67: This is the easiest to explain. Social Security considers anyone born 1960 and later to reach full retirement age at 67. This means that the average Social Security amount $1,341 would not change if someone waits until 67 to begin collecting benefits. Obviously a person’s full retirement amount is based on work history and income, so $1,341 is just the average monthly amount Americans receive as of 2016.
- After age 67 up to age 70: The longer someone waits to receive Social Security retirement benefits the higher monthly amount they will receive up until age 70. There is no benefit to waiting longer than age 70 to collect benefits as the amount will cease to increase after age 70. People born in 1960 and later, who decide to wait until age 70 to collect full retirement benefits, would see an increase of about 24 percent of what their full retirement amount would be. In 2016 the full retirement amount of $1,341 would increase to about $1,663 per month.
All individuals should consider these options and what would be best for them. Some people cannot wait until age 70 to collect benefits or even wait past age 62 to receive benefits, but the longer people wait the more money they will receive into their retirement. For more information about this topic click here.
