When Should You Start Collecting Social Security Benefits
To determine when you should start taking your benefits, its important to understand how much your check is affected by when you claim your benefit. As mentioned before, you can claim your benefit as early as age 62, but reaching full retirement age can secure your full benefit.
So when exactly is full retirement age? That depends on when you were born.
|Year of birth|
|65 + 2 months for each year past 1937|
|66 + 2 months for each year past 1954|
|1960 and later||67|
While the full retirement age used to be 65, changes to the program have increased that age. For example, those born in 1955 now have to wait an extra two months beyond age 66 to claim their full benefit. Someone born in 1959, for example, would have to wait until age 66 and 10 months to get the full benefit. Anyone born in 1960 or later, receives their full benefit at 67.
But some retirees choose to wait even longer. You may wait until as late as age 70 to claim your benefit, but then you must take it. Youll receive a bigger check for doing so.
So what is the upside to delaying your Social Security benefit after age 62? Your check wont get hit by a serious benefit reduction. Heres how much a $1,000 monthly check will become if you claim your benefit as soon as youre eligible at age 62.
|Year of birth||If you file at 62, benefit reduced by:||A $1,000 check becomes|
Whats Your Social Security Break
If youre looking to maximize your total lifetime Social Security payout, youll want to conduct a break-even analysis to determine when you should start drawing your benefits.
Your break-even age occurs when the total value of higher benefits starts to exceed the total value of lower benefits .
For example, if you are eligible to collect a reduced $900 benefit at age 62 plus 1 month, and your benefit would increase to $1,251 at age 65 and 10 months, your estimated break-even age is 75 years and 5 months.
If you expect to live beyond that age, it could make financial sense to delay drawing benefits. The Social Security Administrations life expectancy calculator can help you decide.
When it comes to calculating a start date for Social Security benefits, however, theres not an age thats appropriate for everyone. Consider your own financial needs, health and other retirement plans before making the call. If you cant reasonably afford to live without taking benefits, it may make little sense to delay taking your benefit.
Your Retirement Age And When You Stop Working
Your retirement age is the age you begin receiving Social Security retirement benefits. For many people, this is not the same age youll stop working.
The age you stop working can affect the amount of your Social Security retirement benefits. We base your retirement benefit on your highest 35 years of earnings and the age you start receiving benefits.
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Are You Willing And Able To Retire At Age 55 Lets Run The Numbers
What happens when you reach 55? For many, this watershed year marks their buyout or downsizing of a company meaning retirement. But, Postpandemically, could you survive?
If you are looking to retire early from the workforce, this is a question you may be asking. The traditional retirement age is 65 for most people. However, early retirement can give you more time to pursue hobbies and explore new interests.
Its vital to have a solid financial foundation before you leave your job. Calculating the numbers can help you decide if retirement at 55 is feasible. A financial advisor will help you to estimate when you might be ready to retire.
What Is An Annuity
Annuities are lifetime income plans you purchase.
When its time to retire, you have some additional optionsoptions that can change your finite savings into a monthly, lifetime income called an annuity. An annuity is a guaranteed income plan you purchase. The monthly payments you receive are based on the dollar amount you choose to purchase. The annuity will provide monthly payments for your lifetime. The annuities DRS offers are administered by Washington state with investments provided by the Washington State Investment Board.
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The Social Security Disability Application Process
You can start the Social Security disability application process online. If you prefer, you can visit your local SSA office and start the application in person by meeting with an employee face-to-face. Because of the complexity of a disability claim, an advocate or an attorney can be very beneficial in helping you win your case. You should speak with an attorney before you officially start the application.
Most claims are denied at first, and many go all the way to an administrative law judge for a ruling. However, those who have enlisted the assistance of an advocate or attorney are much more likely to have their disability claim for benefits approved.
Is The Canadian Government Giving Extra Money To Seniors
The one-time grant payments will alleviate the financial hardship of seniors who qualified and received pandemic benefits in 2020, and who faced a reduction or loss of GIS benefits in July 2021. The one-time grant payment compensates eligible seniors for the full loss of their GIS or Allowance benefits.
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At 55 Can I Legally Retire
The retirement rule book doesnt say you cant get out of work at 55. Some members of the FIRE movement plan to retire at 40. If you want to retire in your 50s, it is perfectly legal.
Its important to remember that 55 is not the average age for retirementSocial Securitys normal retirement age is 66 and four months or 67. The higher age means you have to wait until then to start receiving Social Security benefits. As a result, some seniors might choose to work indefinitely or delay their retirement until they are 70.
Is 55 Too Early To Retire
Perhaps you’ve worked hard and want more free time to enjoy your success. Or maybe you’re wondering if you should take the early retirement package you were offered. Either way, retiring at 55 is considered early. For some investors, it’s too early. But if you’ve been diligently saving and can manage your lifestyle expenses, retiring at 55 could be within reach.
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Should I Take Survivor Benefits At 60
If You Haven’t Applied for Retirement Benefits Yet If both payouts currently are about the same, it may be best to take the survivor benefit at age 60. It’s going to be reduced because you’re taking it early, but you can collect that benefit from age 60 to age 70 while your own retirement benefit continues to grow.
How Much Can You Get From Social Security If You Retire At Age 55
If a person chooses to retire at age 55, he is not eligible to receive any benefit payments from Social Security, according to the Social Security Administration. To receive benefits, a person must reach at least age 62, as of 2015, although the benefits are reduced when retiring that early.
In the case of early retirement at any age, benefits are reduced by five-ninths of one percent per month for the first 36 months, and five-twelfths of one percent per month for every additional month beyond the original 36 months, explains the SSA. To receive the maximum benefit with delayed retirement credits, the age is 70.
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What If I Want To Work In Retirement
Sometimes leaving the workforce is neither feasible nor appealing. Thats why some retirees find part-time jobs to pass the time or earn extra money.
Getting a part-time job after retiring early may reduce your benefit amount until you reach full retirement age. The SSA may withhold a certain amount of money from your benefit check if your earnings exceed the annual limit. For 2021, your benefits will be reduced by $1 for every $2 you earn above $18,960. If youll reach your full retirement age in 2021, your benefits will be reduced by $1 for every $3 you earn above a different limit up until the month you turn 67. For a comparison, benefits were reduced in 2020 by $1 for every $2 earned above $18,240, and reduced by $1 for every $3 earned above $48,600 for those who reached full retirement age that year.
The SSA doesnt penalize working retirees forever. Youll receive all of the benefits the government withheld after you reach your full retirement age. At that time, the SSA recalculates your benefit amount.
When Can You Retire
Now that weve discussed how much money you can get in retirement, lets talk about when you can retire. You need 5 or more years of service to qualify for a retirement with PERS Plan 2. Full retirement age is 65. You can also choose to retire as early as age 55, but your benefit could be reduced depending on your total years of service.
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Watch Out For Hidden Costs
Youll also want to consider other lifestyle factors, especially Medicare. Americans become eligible for federal health insurance coverage at age 65, well after when you can begin to file for Social Security.
If you stop working at age 62 and lose health insurance, you have to get supplemental insurance to bridge the gap until you turn 65 and Medicare kicks in, Neiser says.
If you work during retirement, you have another incentive to delay collecting Social Security. Earning too much at a job after you begin collecting your benefit can reduce your payout, but only if you have yet to hit full retirement age.
However, when you hit full retirement age, your benefit will increase to account for any benefit that was withheld earlier due to working. Heres how much you can earn and not get hit.
If youre younger than full retirement age for all of 2021, the Social Security Administration will deduct $1 of your monthly check for every $2 you earn above $18,960 per year.
If you reach full retirement age in 2021, the administration deducts $1 of your monthly check for every $3 you earn above $50,520 until the month you reach retirement age.
Youll also owe Social Security and Medicare tax on your earnings, even if youre already receiving benefits.
So those are some potential pitfalls to claiming Social Security early.
Death Of A Retired Member
Please contact DRS as soon as possible. If the retiree chose a survivor benefit, we must update the account for payments to continue. If the retiree did not select a survivor option, we need to stop monthly benefits to avoid an overpayment. When you contact us, please be ready to provide the deceased retirees full name, Social Security number and date of death.
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What Amount Of Money Do I Need To Retire At 55
It is different to plan to retire at 55 than to retire at 65. This is because you will need more money to support yourself through old age. Your money must last for 25 years if you plan to retire at 65. If you are retiring at 55, however, your savings must be able to last for 35 years. This assumes that you are healthy and wont need long-term care.
If this happens, it could severely drain your assets.
How much money will you need to retire at age 55? It all depends on what kind of lifestyle you choose. You may be able to live a more minimalist lifestyle, which allows you to reduce your expenses. On the other hand, if your early retirement plans involve traveling, buying a house, or starting a company, then you might need to have a bigger nest egg.
- Consider these things when planning your budget for retirement at 55
- Current monthly expenses
- How much would your expenses be if you downsize early?
- What is your retirement age?
- How much income do you have coming in before you can receive Social Security benefits? You will also be eligible to withdraw penalty-free from a 401k or IRA.
- What amount have you saved to date outside of an IRA or 401?
- How long do you need to save and invest before reaching age 55?
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How Old Do You Have To Be To Retire
Full retirement age, or the age you need to be to collect full Social Security benefits, is 66 years and two months for those born in 1955 and will gradually increase to 67 for those born in 1960 or after. How old you have to be to retire comfortably depends on the lifestyle you want to have and how much you have saved. The earlier you retire, the larger the nest egg you will need.
Health Insurance Options Before Medicare
Unless your spouse is still working and you can join his or her health insurance plan, paying for health insurance on your own may be prohibitive. With Medicare eligibility beginning at 65, what are your options for health insurance if you retire at 55?
COBRA coverage generally only lasts for 18 months if you retire early, and you need 10 years. The public exchanges will usually be more affordable than private insurance, but it’s still really expensive, and the cost varies by state.
According to this calculator from the Kaiser Family Foundation, two 55-year-old adults in Boston, MA would pay a premium of $995 per month in 2020 for a silver plan, assuming they’re not eligible for subsidies. The same couple would pay $1,590/month in Jupiter, FL and $1,359/month in Houston, TX.
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Can You File A Claim After Your Dli
You don’t have to apply for SSDI benefits before your DLI you just have to become disabled before your DLI. If your disability started years ago, it may be harder to prove, but not at all impossible.If your DLI is before you file your claim, you can :
- Ask your doctor to address in your medical records what your medical condition was, including your functional limitations, before your DLI.
- If you didn’t see a doctor or get a diagnosis before your DLI, ask your doctor to “infer” how long your physical or mental problems likely affected your ability to function based on your history and current findings.
- Tell the SSA about the period before your DLI expired.
- Statements from family, friends and others in the community about your problems and how they affected you before your DLI can also be used to support a claim.
- Consider hiring a disability lawyer, who will be familiar with the difficulties of filing a claim for a disability that began in the past.
What Is The Rule Of 55
There’s usually a 10% penalty for withdrawing funds from your 401 before age 59 1/2. There is an exception, though, if you’re age 55 or older. You can receive distributions from your 401 if you’re separated from your employer if it happened during or after the year you turn 55. A separation can include being laid off, fired, or quitting.
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Early Retirement And Social Security Payments
If youre wondering how much youll get from Social Security, you can check out our Social Security calculator. It estimates how much youll earn depending on your annual income, the year you were born and when you choose to start receiving benefits.
The calculations for Social Security benefits come from your highest 35 years of earnings. Thats how the Social Security Administration comes up with your average monthly indexed earnings . If you retire too early , youll receive less Social Security. Thats the downside to an early retirement.
The table below comes from the Social Security benefits retirement planner and calculates the monthly increase rate by birth year:
|Delayed Retirement Increase|
|8%||2/3 of 1%|
This means that the maximum number of retirement months is 60 for those retiring at age 62 when the full retirement age is 67. So your benefits could be reduced by up to 30%. Social Security calculates this maximum by multiplying 36 months by 5/9 of 1% and then adds total of 24 months multiplied by 5/12 of 1%.
What Age Can You Retire
The age at which you can retire and collect Social Security benefits and the age at which you should retire aren’t necessarily the same. While you become eligible for Social Security at age 62, you don’t actually qualify for your full monthly benefit amount until a few years later. For those born between 1943 and 1954, it doesn’t happen until age 66. For anyone born after that, the age increases in two-month increments is 66 plus two months) up to age 67 for anyone born in 1960 or later.
If you claim benefits at 62, you only get 75% of the full amount, which makes up for the fact that youll be getting checks for a longer period of time. The benefit for your spouse takes a hit as well. They will only get 35% of your full retirement amount, compared to 50% if you wait until at least 66.
Chances are that you’ll need a large nest egg to supplement your Social Security funds, especially if you hang it up very early. And the earlier you retire, the more you’ll need. Keep in mind, too, that you won’t be eligible for Medicare until you reach age 65, so you’ll almost certainly face steep out-of-pocket costs if you have to purchase health insurance on your own.
An individual applying for health insurance that complies with the Affordable Care Act pays an average of $456 per month in premiums. By contrast, in 2022, the standard Medicare Part B premium is $170.10 per month , and it gets you coverage with a relatively low deductible of $233 a year .
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