Social Security Full Retirement Age: Your retirement income will be impacted for a long time by your decision to start receiving Social Security benefits at age 62, 67, or 70. While delaying greatly increases your benefits, starting early results in lower monthly payments. One of the most important retirement planning decisions is when to begin receiving your Social Security benefits.
Choosing when to start receiving Social Security benefits is a personal choice that needs to be carefully thought out in light of your long-term objectives, health, and financial needs. Delaying benefits can eventually result in much larger monthly payments, even though starting early offers immediate income.
Know Social Security Benefits
- For many Americans, Social Security is their main source of retirement income.
- Your Primary Insurance Amount (PIA), which is based on your average indexed monthly earnings (AIME) over the 35 years with the highest earnings, determines how much you will receive each month.
Social Security Full Retirement Age (FRA)
The age at which you are qualified to receive 100% of your PIA is known as your Full Retirement Age (FRA). For those who were born after 1960, the FRA is 67 year. Choosing to make a claim either before or after your FRA modifies your payout:
- Early Retirement (Age 62),your monthly payments are lowered to 70% of your PIA if you choose to retire early (at age 62).
- Delayed Retirement (Age 70)raises your payments to 124% of your PIA.
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Average Social Security Benefits by Age
| Social Security Full Retirement Age | Percentage of Full Benefit | Average Monthly Benefit | Key Considerations |
| Age 62 | 70% | $1,311 | People with shorter life expectancies or those in need of immediate income frequently select this option. |
| Age 67 | 100% | $1,894 | You will receive your entire benefit amount if you wait until your FRA. For many retirees who do not require early access to benefits, this is the default option. |
| Age 70 | 124% | $2,068 | Benefits deferral maximizes your monthly payments and provides substantial long-term financial benefits, particularly for those with longer life expectancies. |
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Factors for Determining Your Retirement Age
1. Expectancy of Life: Delaying benefits can increase lifetime earnings if you anticipate living into your 80s or 90s. For instance, a person who begins receiving benefits at age 70 and lives to 90 will earn a lot more money overall than someone who begins at age 62.
2. Needs for Money: It may be best to start receiving benefits at age 62 if you have urgent financial needs. However, your monthly payments will be permanently reduced as a result of this decision.
3. Workplace Situation: Benefits may be impacted if you continue to work after age 62:
- Prior to FRA: Your benefits may be temporarily reduced if you make more than the annual cap ($21,240 in 2024).
- Following FRA: Your benefits won’t be diminished, and there is no earnings cap.
4. Additional Sources of Retirement Income: Consider your other sources of income, including investments, savings, and pensions. The flexibility to postpone Social Security and optimize benefits can be obtained through a diversified income strategy.
