The Best Age for YOU to Retire
Reading Time: 2 MinutesLast Updated: May 12, 2015
You may be trying to figure out what the most beneficial age is to say goodbye to your colleagues at the office. This is one of the most important and challenging decisions you’ll make in your life. When you decide to retire affects not only you, but it could have serious, long-lasting consequences for your family members, too. The answer is not the same for everybody, and I’m going to share some information that can help you make an informed decision based on your own personal situation.
If you delay receiving your Social Security until age 70, the monthly amount is 32 percent more than you would get at full retirement age.
From a Social Security standpoint, you can start getting lower benefits as early as age 62, or you can delay retirement up to age 70 for your maximum monthly benefit amount.
For example: Let’s say your full retirement age for Social Security benefits is 66, and your monthly benefit at that age is $1,000. Here’s what your monthly benefit would be, starting at different ages:
* Age 62 = $750
* Age 63 = $800
* Age 64 = $866
* Age 65 = $933
* Age 66 = $1,000
* Age 67 = $1,080
* Age 68 = $1,160
* Age 69 = $1,240
* Age 70 = $1,320
At age 62, your benefit amount is about 25 percent lower than your full benefit at age 66. If you delay receiving your Social Security until age 70, the monthly amount is 32 percent more than you would get at full retirement age. From 62 to 70, that comes to a monthly increase of $570 or $6,840 a year.
When to retire is a personal decision that you should base on factors such as your current cash needs, your health, and family longevity, whether you have other retirement income sources, and of course, your anticipated future financial needs and obligations. Remember, the average retirement will last for about 20 years, and Social Security benefits are typically adjusted annually for inflation to help maintain your standard of living. For more information, visit www.socialsecurity.gov.
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About the Author
Doug Walker, Deputy Commissioner, Communications
Deputy Commissioner, Office of Communications
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Mike A.
I noticed that my two years of my earnings on my ss year by year earnings chart , that is used for calculating benefit amounts, we’re not included or showed zero for those two years. I don’t believe I filed taxes for those two years and have somehow gotten by after some 20 years. However, for those two years I referred to, I made the most each year of all years of income ever!
My question is, if I bring this omission of the two years income up to the social security admin. , and i, in fact, had failed to file taxes for those two years, will I have sparked a RED FLAG to my failure to file taxes for those years and be held accountable to penalties and interests for any potential taxes owed for those two blank years??
Don’t want to wake the sleeping giant if it has been overlooked, right?
Or would the fact that my income for those two years was three times any other year of my life working income? Would that fact be worth ( benefit amount) me bringing it to ss admin. Attention??!
Ray F.
Hi Mike, the amount of your Social Security benefit will depend on the amount of your average lifetime earnings. Generally, we use the highest years of earnings to calculate your monthly benefit amount. You will need to go into your local Social Security office to correct your earnings record. When you go, you will need to provide proper ID and evidence of your missing earnings, such as W-2s, pay stubs, etc. You can call our toll free number at 1-800-772-1213 (TTY 1-800-325-0778) to make an appointment. Representatives are available Monday through Friday between 7:00a.m. and 7:00p.m. Generally, you’ll have a shorter wait time if you call later in the week. For any income tax related questions, you will need to contact the IRS. Their toll-free number is 1-800-829-1040. We hope you get this matter resolved soon!
Robert
I am currently 60, my wife is 56 and she is currently unemployed, but eligible to receive SS at her retirement age. I plan on retiring at 65. How does my retiring at that age effect my benefit, what portion of my benefit is my wife eligible for at age 62?
Ray F.
Hi Robert, if a person starts receiving retirement benefits at age 62 or any time prior to their full retirement age, their benefit amount is reduced.
Visit our Retirement Planner: Benefits By Year Of Birth and find out how much your benefit will be reduced if you retire between age 62 and full retirement age. To learn more about your wife’s benefits, visit our Frequently Asked Questions web page. We provide a variety of benefit-calculators to help you plan for the future. Also, you and your wife can create a my Social Security account to verify your earnings, get your Social Security Statement, and much more. We hope this information helps!
Diana
I’m curious … I am 66 yrs old and signed up for SS at 62 .. however, as I remained working and was making over $41,000 a year I never collected anything .. maybe $500 at the end of a couple of years … that ‘s all … did what I DID NOT COLLECT go back into my account and should the amount that I would have collected at 62 go up any at all since I actually never collected any of it? Sorry is that confusing?
Ray F.
Good question Diana. For individuals receiving Social Security benefits while continuing to work, we will recalculate their benefit amount the year they attain their full retirement age (currently age 66), to give them credit for any months in which they did not receive any Social Security benefits due to their earnings. Generally, we will send a letter explaining any increase in your benefit amount. If you continue to work, remember that starting with the month you reach full retirement age, there is no limit on how much you can earn and still receive your Social Security benefits. Please call our toll free number at 1-800-772-1213, Monday through Friday, from 7 a.m. to 7 p.m. or contact your local office directly for further assistance.
Dean
I am 66 years old the 10th of April this year, not receiving SS income, and my part-time earned income will be $8,000.00 per year for the next several years. If I start collecting SS next year, my SS income is estimated to be $26,796/year. My wife is 57 years old (still working and not receiving social security and does not plan on filing for SS until she is 62). She earns $80,000.00 per year – my question is: how does my wife’s income affect the tax on my SS income if we file separately or if we file jointly?
Ray F.
Hello Mr. Dean, some people may have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income(such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) . Your question is an income tax question, and you will need to contact the Internal Revenue Service (IRS). Their toll-free number is 1-800-829-1040. Thanks.
Dean
Thank you.
Shelley
If I retire on my pension at age 57, but don’t collect social security until age 67, is there a calculator for this scenario? How would I estimate my benefit? The calculator on SSA website assumes I will work until age 67.
Ray F.
Hi Shelley, our Retirement Estimator is exactly the calculator you are looking for! It gives you future estimates of your monthly Social Security benefits based on your actual Social Security earnings record.
In addition, we have a variety of other calculators to help you plan for the future. Which calculator you choose depends on what you want to do. We suggest that you create a my Social Security account. With your personal my Social Security account, you can verify your earnings, get your Social Security Statement, and much more. Happy planning!
BobW
The retirement estimator linked above doesn’t answer the question. It assumes that one keeps working until the date at which SSA benefits start. Is there a calculator for “I stop working and earning money at age 67 but defer collecting benefits until age 70”?
DJ B.
I am a new immigrant to the USA. I am 64 years old. I will start my first working quarter in USA in 2016. If I worked for 10 year at $30000/year salary.
1. Will I be eligible and receive social security benefits?
2. If yes, how much will it be approximately in todays dollars?
I tired to estimate my benefits with the Quick Calculator online. It does not take into account the quarters I work after reaching 62. So it says I have zero qualifying quarters.
Ray F.
Thank you for your questions DJ Bhola. We are sorry that you were not able to use any of our many calculators. Current law requires that an individual earns 40 credits to qualify for Social Security retirement benefits. You can earn a maximum of four credits for any year. The amount needed for a credit in 2016 is $1,260. The amount needed to earn one credit increases automatically each year when average wages increase.
Work Credits are the “building blocks” we use to find out whether an individual has the minimum amount of covered work to qualify for each type of Social Security benefits. We can’t provide your actual benefit amount until you apply for benefits, but we hope this information helps.
Bruce A.
After hitting my FRA, does my monthly benefit go up each month I defer, or only by annual increments? In other words, if I claim at 66 and 6 months will my check be larger than it would have been on my 66th birthday?
Ray F.
Thank you for your question Bruce. If you delay benefits past your full retirement age, your year of birth and the number of months you delay determines how much your benefit can increase. See our Retirement Planner: Delayed Retirement Credits web page for complete information.
soni
I would like to know delay benefit is good or 6 month retroactive benefit claim better if FRA in August and take 6 month reactive benefit in feb 2017. This will differ earning 2016 earning in 2017. please clarify
Ram
I am 66 years old. If I start taking SS benefits then I understand that there is no penalty if I am working and earning.
My wife is 62 and she does not work. If she starts taking SS benefits on my records. Will there be any reduction in her payments due to my earnings.
Jenna Y.
Thank you for your question. Your wife may file for spousal benefits under your record as long as she is already receiving benefits. However, if she is between age 62 and her full retirement age, her spousal benefit will be permanently reduced by a percentage on the number of months up to her full retirement age.
Also, the Bipartisan Budget Act of 2015, made some changes to Social Security’s laws about claiming retirement and spousal benefits. Section 831 of the law (entitled “Closure of Unintended Loopholes”) made several changes to the Social Security Act and closed two complex loopholes that were used primarily by married couples. Our Retirement Planner: Recent Social Security Claiming Changes explains what is changing and how it might affect you. If you still have questions, or need further assistance, you should call our toll-free number at 1-800-772-1213. Representatives are available between 7 a.m. and 7 p.m., Monday through Friday but you will generally have a shorter wait time if you call later in the week. We hope this information is helpful.
Robbie T.
At 61.75 I am about to “retire” from my company, only in terms of leaving my employment, i.e. I don’t intend to collect SS until my full retirement age (66) or later (70). But, leaving work at essentially 62, that does not penalize me in regard to my SS benefits when I do begin taking it, right? In other words, just because I am leaving my employment at 62, I won’t loose any amount of my benefits that I will have when I do file years down the road?
Ray F.
Thanks for your question Robbie. You will not be penalized for leaving your employment at age 62. However, If a person file and starts receiving Social Security retirement benefits at age 62 or any time prior to their full retirement age, their benefit amount is reduced. In the other hand, you earn Delayed Retirement Credits when and if you delay getting your benefit up until age 70. To help you plan for the future, you can use our Retirement Planner and you can also create a my Social Security account to verify your earnings, get your Social Security Statement, and much more. We hope this information helps!
C. R.
I began receiving SS benefits March 2015 at age 65. Is it too late to withdraw my SS and pay back the amount received and reapply after my FRA in March 2016? I learned I could have filed on my former spouse’s SS if I had waited until 66 and delayed mine until age 70.
Ray F.
Thanks for your question. Yes, you may be able to withdraw your Social Security claim and re-apply at a future date. However, you must do this within 12 months after the date you originally began receiving benefits. Keep in mind that there are some things you need to know about what will happen if you withdraw your application. Read the details at “If You Change Your Mind”. Please contact your local Social Security office directly or call our toll free number at 1-800-772-1213, Monday through Friday, between 7 a.m. and 7 p.m. for further assistance.
Tom M.
I have three questions that should help to finalize my decision on continuing to work or retire at Age 66:
1. My wife and would receive $1,400 and 2,400, respectively at age 66 (April 2016)
What percent penalty is there for a married couple if the combined monthly amount is $3,800 and neither one of us is working?
2. Same as above, but continue to work at a $100,000 salary.
Note: Is the $3,800 ($45,600 yearly) combined not withstanding any penalties, if applicable and added as Gross Income for a total of $145,600 and taxed at the normal rate at that amount?
3. What is the maximum you can earn as a couple before you are penalized using my example above?
Ray F.
Hi Tom, it seems like you are planning your retirement and your wife’s retirement when you both attain your full retirement age. If you were born January 2, 1943, through January 1, 1955, then your full retirement age is 66. If you are working in 2016, the limit on your earnings is $41,880, but we only count earnings before the month you reach your full retirement age. We deduct $1 in benefits for every $3 you earn above that limit. You may continue working and keep all of your benefits when you attain full retirement age, no matter how much you earn. We apply these earnings limitations individually not as a couple. Some people have to pay federal income taxes on their Social Security benefits. This usually happens only if you have other substantial income (such as wages, self-employment, interest, dividends and other taxable income that must be reported on your tax return) in addition to your benefits. For further income tax questions, you will need to contact the IRS. Their toll-free number is 1-800-829-1040