What Is the Legal Age for Retirement
If you apply for your benefits at full retirement age, you will receive your standard Social Security amount. If you apply to the FRA, you will be subject to early deposit penalties that reduce your benefit by the following amounts: Even after you reach full retirement age, and even if you have already applied for benefits, the Social Security Administration will continue to recalculate your average annual salary to account for your new income. If your income under FRA is higher than in previous years and your average salary for your top 35 years increases, your benefits may increase accordingly. The Social Security retirement age with full benefit is gradually increasing as a result of legislation passed by Congress in 1983. Traditionally, the age of full benefit was 65, and early retirement benefits were first available at age 62, with a permanent reduction to 80% of the total benefit amount. Currently, the age of full benefit is 66 years and 2 months for persons born in 1955 and will gradually increase to 67 years for persons born in 1960 or later. Early retirement benefits will continue to be available at age 62, but will be further reduced. When the age of full benefit reaches 67, benefits received at age 62 are reduced to 70% of the full benefit and benefits used for the first time at age 65 to 86.7% of full benefit. To determine your full retirement age, use the Social Security Administration`s (SSA) online calculator. Men retire later than women or at the same time. This issue is being addressed in some countries where the retirement age is aligned.
If you continue to work after reaching full retirement age, you can work and earn as much as you want. You will not be subject to the pension income test and your Social Security benefits will not be affected. It`s important to know your full retirement age because it affects when you can apply for Social Security without reducing your benefits, how much delayed retirement credits you can earn to increase your benefits, and how much you can earn while working and receiving Social Security without losing your benefits. There are a few other important things you may need to know about the full retirement age. You can choose to receive Social Security benefits from age 62. However, applying for benefits at an age prior to your FRA will permanently reduce your benefits. For example, if your FRA is 67 and you start claiming benefits at age 62, benefits drop to 70% of what you would have received at full retirement age. You will receive 86.7% of the full old-age pension if you start applying at the age of 65. The Motley Fool hit the ground with retirement expert Jialu Streeter, Ph.D., a researcher at the Stanford Center on Longevity.
The graph below shows the full retirement age for people born at different times. Streeter: First, I would suggest that the person and their family do a thorough review of all their assets and debts, including home equity, mortgages, student loans (including their children if they co-signed), pension balances, and other chequing and savings accounts. Second, it is important to understand the impact of retirement age on Social Security benefits. For some people who are healthy and can afford to delay Social Security, it might be better for them to be reluctant to receive higher benefits for the rest of their lives. Third, the person or family needs to have an honest conversation about their planned retirement style. For example, will they travel a lot? Will they eat out or cook at home? Finally, the risk of longevity. Whether they will survive their wealth. People need to put all these points together to see if they are on their way to the retirement life they had planned. Many of the countries listed in the table below are in the process of reforming the era (see the notes in the table for details). The age in the table indicates when a person retires if they retire in the year indicated in the table; In some countries, the trend is towards a gradual increase in age in the future (where appropriate, explanations are given in the comments section) so that the year of birth determines when retirement age is reached (e.g. in Romania, women born in January 1955 had the retirement age at 60 in January 2015; born in January 1958 who reached retirement age in January 2019 at the age of 61; those born in January.
1961 will retire in January 2023 at age 62; those born in January 1967 will retire in January 2030 at age 63). [4] There is a financial premium for late retirement. A person who reaches full benefit age in 2017 (66 years and 2 months) receives a monthly benefit that is 8% higher for each year they delay receiving benefits until the last claimed period of age 70, with benefits being 132% of what they would have been at normal retirement age. (If the age of full benefit reaches 67, the benefits claimed at age 70 are 24% higher because of this delay.) The maximum retirement pension in 2017 for a person who waits until age 70 to receive benefits is $3,538 per month. Full retirement age (FRA), also known as normal retirement age, is the age at which you can receive full Social Security retirement benefits. The age of full retirement varies depending on the year of birth. FRA is 66 years and two months for people born in 1955 and gradually increases to 67 months for people born in 1960 or later. Retirees can work while receiving Social Security benefits, but those who are younger than their FRA are subject to the Pension Income Test (RET). Applying for benefits before retirement age reduces them permanently.
This data applies to pension benefits you earned while working and spousal benefits your husband or wife may receive in your employment file. They differ slightly for survivor benefits, which you can claim if your spouse dies. The full retirement age for survivors is 66 for those born in 1956 and gradually increases to 67 for those born in 1962 or later. Your FRA has no control over where you live. Most social security regulations, including those that determine the amount of benefit and the age of eligibility, are set by federal law. However, some states tax Social Security benefits, so where you live can affect the amount of tax on your retirement income. But again, the age at which you claim benefits doesn`t affect your tax rate – your income is the key factor. You can apply for Social Security benefits as early as age 62. However, this permanently reduces your benefits to 70% of what you would receive at full retirement age.
There are pros and cons to applying for your benefit before full retirement age. The advantage is that you receive benefits over a longer period of time. The disadvantage is that your usefulness is reduced. Each person`s situation is different. It is important to remember that if your income exceeds a certain limit on this test (which changes each year), you will temporarily lose some or all of your benefits. Once you reach full retirement age, your benefit will be recalculated and you will be able to get most of that money back. Jialu Streeter, Ph.D., researcher at the Stanford Center on Longevity. Jialu`s research focuses on the economics of aging, old age security, financial security, and the psychological well-being of older adults. Yes. The full retirement age (FRA) — the age at which you`re eligible to claim 100% of the benefit calculated by Social Security from your lifetime income registration — has already increased from 65 to 66 and 4 months, and will gradually increase to 67 over the next few years.