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Social Security Ages For Full Benefits

Questions Regarding Social Security

What is the Full Retirement Age for Social Security?

If you have questions regarding Social Security, you may want to visit the Social Security Administration’s website at www.socialsecurity.gov to find your answers. If you prefer to speak to someone directly, the SSA is available to speak with callers Monday thru Friday from 7:00 a.m. to 7:00 p.m. The toll-free number is 800-772-1213.

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Social Security Disability Insurance

SSDI is a federal insurance program that is administered by the Social Security Administration. It was established in the year 1954 with the object of providing individuals with a source of income in the eventuality of their becoming unable to work due to a disability. The SSDI program provides monthly benefit payments when medically determinable physical and/ or mental impairment are expected to last for 12 or more months or result in death, preventing the applicant from working.

For receiving SSDI benefits, the Social Security Administration has to determine that the applicant is disabled. For this purpose, the following conditions must be satisfied-

  • You are unable to engage in substantial, gainful activity due to the physical or mental impairment that is expected to result in death or has lasted or is expected to last, for at least one year.
  • You are unable to handle the requirements of the job that you were able to handle before becoming disabled.
  • You are unable to adjust to other types of work because of your physical or psychological condition.
  • The disability is a consequence of a physical or psychological impairment that can be determined by the medically acceptable, laboratory, or clinical, diagnostic techniques.

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Benefits Of Raising The Retirement Age

Strengthens Social Security

The program would be more sustainable over the next several generations by slowing Social Securitys growing costs. How much the cost growth would be moderated would depend on the specifics of how fast and how high to raise the retirement age.

Compensates for increased longevity

Older workers would gain more time to build their retirement savings while still enjoying a long period of retirement. The fact that increased longevity is among the causes of Social Securitys financial problems suggests that raising the retirement age should be part of the solution.

Preserves the current benefit formula

Future retirees would receive the same benefits as current retirees but they would begin at a later age to reflect Americans increasing lifespans. This would preserve the current Social Security benefit formula, which has been in place for more than 30 years and has successfully balanced the competing interests of many demographic groups that receive Social Security benefits.

Increases labor force participation

Through improvements in health care, larger numbers of older workers could stay in the workforce and raise total U.S. economic output.

Preserves intergenerational equity

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C You Can Continue Working And Not Receive Your Retirement Benefits

If you decide to continue working and not start your benefits until after full retirement age, your benefits will increase for each month you do not receive them until you reach age 70. There is no incentive to delay filing for your benefits after age 70. Continuing to work may also increase your benefits, because your current earnings could replace an earlier year of lower or no earnings, which can result in a higher benefit amount.

If you are not receiving your Social Security benefits when you turn 65, you will need to apply for Original Medicare three months before you turn 65. If you dont sign up for Medicare Part B when youre first eligible at age 65, you may have to pay a late enrollment penalty for as long as you have Medicare coverage.

However, if you or your spouse are still working and covered under an employer-provided group health plan, talk to your personnel office before signing up for Medicare Part B. Once the covered employment ends, you may be eligible for a Special Enrollment Period to sign up for Part B. If so, you wont have to pay a late enrollment penalty.

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Bridge To Medicare At Age 65

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Remember that while you are eligible for reduced Social Security benefits at 62, you won’t be eligible for Medicare until age 65, so you will probably have to pay for private health insurance in the meantime. That can eat up a large chunk of your Social Security payments.

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Watch For These 5 Changes To Social Security In 2023

More than 70 million people depend on one of Social Securitys benefit programs, so annual changes to the program and its payouts are always highly anticipated. But substantially higher benefit checks have been a rarity in recent years. With inflation soaring in 2022, the extra money will help seniors and others make ends meet.

Waiting To Claim Social Security Can Increase Your Payout

Let’s say John, who was born in 1955, is in good health and enjoys his job. John’s full retirement age is exactly 66 and two months, at which point he can claim 100% of his monthly Social Security benefit of $1,500. John decides to continue working for a few more years, until his 69th birthday, and delays his benefit.

By the time John claims his Social Security benefit at 69, his monthly payout will be $1,840, 122.7% of his full retirement-age benefit. By delaying, John increased his monthly Social Security income by about $340. Note that the rules are different for spouses consult the Social Security website for details.

Anyone can create a free My Social Security account to find out what their pretax monthly Social Security benefit will be, based on current earnings, and see how that could change depending on the date they leave work. For those in good health or with a greater chance of longevity, it may be worth it to hold out.

Research from United Income found that elderly poverty could be cut in half if every retiree claimed Social Security at the “financially optimal time.” The report said retirees stood to lose a collective $2.1 trillion in wealth, or about $68,000 per household, because they chose to claim Social Security benefits at the wrong time, which, for many, is before their full retirement age.

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Working After Full Retirement Age Might Increase Benefits

For the purposes of calculating your retirement benefit, working after full retirement age is essentially the same as working before. After all, youll continue to pay Social Security taxes on your earnings as long as you work, so youre still eligible to derive benefits from those earnings.

But your actual benefit will increase only if youre still earning at a level that equals or exceeds your top 35 working years. If your earnings are less, they wont affect your benefit because the SSA uses your top 35 years of earnings to calculate what youre paid.

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In this sense, its not worth it to continue working from full retirement age to age 70 if you arent earning much, at least from a Social Security benefit perspective. Obviously, youll still get to keep the money you earn but, unless those years are among your top 35, your Social Security retirement benefit wont increase.

Here’s How To See What Your Social Security Cola Increase Amount Is For 2023

The Full Retirement Age for Social Security Answered

This is the impact the cost-of-living adjustment will have on your 2023 benefits.

If you receive Social Security benefits, you’ve probably heard about that big cost-of-living adjustment increase coming your way next year. For those who created an online My Social Security account by Nov. 15, you can finally see how much extra you’ll be getting. If you did, we’ll explain below how to find the document with your COLA increase. If you don’t have an account, don’t worry. You’ll receive a letter in the mail with this information.

A My Social Security account will show you your current or expected future benefits, based on your expected retirement age and your work history. You can also get documents for filing your taxes, request a benefit verification letter or change your mailing address and other personal information.

Here’s how to access your Social Security benefits online, and what sort of information and features you’ll be able to access with your My Social Security account. If you receive benefits now, here’s the Social Security payment schedule for December. Also, Supplemental Security Income recipients will get their first increased check in December.

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You Can Undo A Social Security Benefits Claiming Decision

There arent many times in life you can take a mulligan. But Social Security offers you the chance for a do-over. Lets say you claimed your benefit, but now regret the decision and wish you had waited. During the first 12 months of claiming benefits, you can withdraw your application. You will have to repay all of the benefits youve received, along with any spousal benefits, but when you restart benefits, youll receive a larger amount, just as you would have if you had delayed filing in the first place.

If it has been more than 12 months since you filed for Social Security, you cant withdraw your application and restart benefits at a later date. But early retirees who have returned to the workforce are not totally out of luck: Once you reach full retirement age, you can suspend benefits until age 70. This will enable you to earn delayed-retirement credits of 8% a year . This can add up to tens of thousands of dollars for many people, says William Meyer, chief executive of Social Security Solutions.

You Fear You Won’t Be Around To Collect Later

If you don’t expect to live long enough to profit from delaying your benefits, your wisest course may be to take them sooner rather than later. Even if you were to receive a much bigger benefit by claiming at age 70, you could be well into your 80s by the time you’d come out ahead in terms of the total benefits you’ve received. Financial planners refer to this as your breakeven age.

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Before You Make Your Decision

There are advantages and disadvantages to taking your benefit before your full retirement age. The advantage is that you collect benefits for a longer period of time. The disadvantage is your benefit will be reduced. Each person’s situation is different. It is important to remember:

  • If you delay your benefits until after full retirement age, you will be eligible for delayed retirement credits that would increase your monthly benefit.
  • That there are other things to consider when making the decision about when to begin receiving your retirement benefits.

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How Will Working Affect Social Security Benefits

Breaking Down Social Security Retirement Benefits by Age

In a recent survey, 70% of current workers stated they plan to work for pay after retiring.1

And that possibility raises an interesting question: how will working affect Social Security benefits?

The answer to that question requires an understanding of three key concepts: full retirement age, the earnings test, and taxable benefits.

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Cost Of Living Adjustment Rises

The SSA has announced that benefit checks will rise 8.7 percent in 2023, a substantial increase even from the 5.9 percent adjustment for 2022, which was already unusually high. In fact, the 2023 COLA is the highest increase since 1981, when it was 11.2 percent.

The 8.7 percent adjustment will amount to a $146 increase in monthly benefits for the average retired worker on Social Security, beginning in January. Specifically, the average check for retired workers will increase from $1,681 to $1,827. For a couple with both partners receiving benefits, the estimated payment will increase from $2,734 to $2,972, a rise of $238.

Since 1975, the SSA has tied cost of living adjustments to the Consumer Price Index for urban wage earners and clerical workers . The SSA compares the third-quarter CPI-W for the prior year to the third-quarter CPI-W in the current year to determine the COLA. It then adjusts the COLA based on the difference in CPI-W from one year to the next.

When Can I Retire When Can I Take Social Security

Obviously, people want the option to retire as soon as they likethe earliest age generally being 62. But the decision to take Social Security retirement benefits can be complicated by your health, your marital status and your spouses Social Security plan.

One of the key factors is the year you were born, as when you were born will determine your Full Retirement Age For people born between 1943 and 1954, for example, Full Retirement Age is 66. As shown below, the Full Retirement Age creeps up by two months for every year between 1955 and 1960. Everyone born after 1960 currently has a Full Retirement Age of 67.

Full retirement age doesnt tell the full picture. As we will explain in this piece, retirement at each age has benefits and drawbacks.

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How The Retirement Age Could Change

Retirement ages were last altered in 1983 under then-President Ronald Reagan.

Those changes, which raised the full retirement age to 67 from 65, are still being phased in today.

Even just the bump up to age 66 from 65 represented a 5% benefit cut, Elsasser noted.

Many experts expect that any future changes could push up the Social Security retirement age. Notably, the Social Security 2100 Act: A Sacred Trust, introduced by Rep. John Larson, D-Conn., last year, would leave those thresholds unchanged and, in some respects, make benefits more generous. But the legislation has a five-year timeframe.

Separately, the Social Security Administration has scored the financial effects other proposals to change the age thresholds could have on the program.

Just in 20 years, we’ve seen a substantial increase in the retirement age.Mark J. Warshawskysenior fellow at the American Enterprise Institute

“I expect that at some point in the not too distant future, Congress will agree on a Social Security package that includes some type of adjustment to the retirement age,” Akabas said. “Whether that’s in two years or 10 years, it’s very difficult to predict.”

Experts say it’s possible the full retirement age could get pushed up by a year or two, which could be gradually phased in.

Additionally, lawmakers could also raise the initial age for eligibility for retirement benefits from 62, as well as the highest age for delaying benefits and earning benefit increases from 70.

What Is My Full Retirement Age

What’s the Best Age to Claim Social Security 62, 66, or 70?

Full retirement age for future beneficiaries will fall between the ages of 66 and 67. This is the age at which you can expect a full, unreduced benefit from Social Security. If you delay filing for benefits until after your full retirement age, you can expect a benefits increase of up to 8% per year until you reach age 70.

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How To Plan For Future Benefits

In 2000, the average age at which people retired was roughly 61 or 62. Two decades later, it’s around 66, according to government data, Warshawsky said.

“Just in 20 years, we’ve seen a substantial increase in the retirement age,” Warshawsky said. “People really, really are working longer.”

Anecdotally, Elsasser said he sees more people retiring earlier than they had anticipated as their work prospects change.

That highlights the importance of planning ahead, so you anticipate whatever your retirement years bring. Admittedly, that can be tricky, given that Social Security could be susceptible to change.

If you’re 60 and up, there is less reason to worry any prospective changes would affect your benefits, Elsasser said.

But if you’re 45 to 60 years old, it’s reasonable to plan for benefit reductions of about 5%, he said. For those who are even younger, a 10% to 15% cut is possible.

Moreover, people of all ages should also plan for worst-case scenarios in which the program does reach a point where it can only pay a portion of benefits, which may prompt as much as a 24% benefit cut for retirees.

“The real importance of planning is just making sure you have all your bases covered,” Elsasser said.

How Age Affects Benefits

You become eligible to collect your full retirement benefit 100 percent of the amount youre entitled to receive based on your lifetime earnings history at full retirement age , which is 66 and 4 months for those born in 1956 and will gradually rise to 67 for those born in 1960 and later.

The minimum age to begin benefits is 62, but Social Security reduces your monthly payment by a fraction of a percent for each month before the FRA that you claim. Someone born in 1960 who starts benefits in 2022 will get as little as 70 percent of their full monthly benefit. That reduction is permanent.

If you put off claiming benefits until after full retirement age, Social Security bumps up your prospective payment for each month of delay. That 1960 baby would get 124 percent of their full retirement benefit, for life, by waiting until their 70th birthday to start Social Security.

Why do benefits increase if you wait past 62? Because Social Security works by the principle that over the course of a retirement, you should receive the same total amount regardless of the age at which you start benefits. Monthly payment levels are calculated so that if you file for reduced benefits at 62, you will receive the same total amount as if you start at 70, or at any age in between, if you live to an average life expectancy.

Of course, the average is just that an average and most people live either shorter or longer lives. Thats where the break-even point comes in.

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