Full retirement age is a crucial factor when planning your retirement and understanding your social security benefits.
It is the age at which you become eligible to receive unreduced old-age, wife’s, husband’s, widow’s, or widower’s benefits. Previously set at 65, the full retirement age is gradually being increased to 67 for people born after January 1, 1938. In this blog post, we will outline the different full retirement ages based on your birth date and explain the implications of retiring before your full retirement age.
Full Retirement Age for Old-Age, Wife’s, or Husband’s Benefits: Your full retirement age for old-age, wife’s, or husband’s benefits depends on your birth date.
Full Retirement Age for Widow’s or Widower’s Benefits: Similarly, your full retirement age for widow’s or widower’s benefits also depends on your birth date.
Early Retirement: If you choose to retire before reaching your full retirement age, you can still receive old-age, wife’s, or husband’s benefits at age 62 and widow’s or widower’s benefits at age 60. However, be aware that your benefits will be reduced. The reduction in benefits is further explained in § 404.410.
Example: Jane’s Retirement Decision
Jane was born on June 15, 1956, which means her full retirement age for old-age benefits is 66 years and 4 months, according to the table provided in the blog post. She has been contemplating whether to retire early or wait until her full retirement age to maximize her social security benefits.
Option 1: Early Retirement If Jane decides to retire early at age 62, she can start receiving her old-age benefits. However, her benefits will be reduced because she is retiring before her full retirement age of 66 years and 4 months. The reduction in benefits will be permanent, affecting her monthly payments throughout her retirement.
Option 2: Full Retirement Age If Jane waits until her full retirement age of 66 years and 4 months, she will receive her full, unreduced old-age benefits. By waiting, Jane can maximize her monthly social security payments and receive a higher amount throughout her retirement.
In summary, Jane must weigh her options carefully, considering factors such as her financial situation, health, and personal preferences. Consulting with a financial advisor could help Jane make the best decision for her retirement planning.
Conclusion: Understanding your full retirement age is essential for making informed decisions about your retirement and social security benefits. Keep in mind that retiring before your full retirement age will result in reduced benefits. Carefully consider your options and consult with a financial advisor to help you make the best choices for your individual situation.
https://www.ssa.gov/OP_Home/cfr20/404/404-0409.htm
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