Deciding when to begin collecting Social Security benefits may be one of the toughest decisions Americans make. Because people can start collecting at age 62, but have the option of waiting until age 70, where they would received maximum payouts, there are a lot of different things to consider.
Sometimes the decision is easy. Many times people who turn 62 elect to collect Social Security benefits immediately because they need the money despite the fact that people who do collect benefits early, before full retirement age which is either 66 or 67 depending on what year you were born, only receive a reduced amount of benefits due to early withdrawal. Other people who continue to work past age 62 can delay collecting benefits until they reach full retirement age, and some can even wait until age 70 to collect so they can receive the maximum amount. There is no benefit in waiting past age 70 and amounts do not increase past this milestone.
There are instances people can suspend their Social Security benefits for a period of time if they are working and possibly reinstate them to earn a higher benefit amount in the future. Since Social Security benefits are based on a person’s highest 35 years of wage-adjusted earnings, many people who do suspend benefits after returning to work do see higher benefit amounts when they decide to collect again.
No one who receives Social Security retirement benefits is forbidden to work, but if you are collecting benefits before your full retirement age your salary can impact the amount of benefits you are eligible for. People who continue to work and who wait until full retirement age and beyond to collect Social Security benefits are not impacted by their work income and will receive their full retirement amounts even if they continue to work.
