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What is full retirement age?

| March 21, 2018
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Did you know that the most common age people begin receiving Social Security is 62?

Did you also know that taking your Social Security early can reduce your monthly benefit by as much as 25%?

So why do people take it early and what is full retirement age?

Let me enlighten you.

Full Retirement Age

Full retirement age is the age at which you would receive your full Social Security retirement benefit. Your FRA depends on what year you were born.

Here is a small table that shows what year you were born and the corresponding age that is your Full Retirement Age.

1937 or earlier65
193865 and 2 months
193965 and 4 months
194065 and 6 months
194165 and 8 months
194265 and 10 months
1943 - 195466
195566 and 2 months
195666 and 4 months
195766 and 6 months
195866 and 8 months
195966 and 10 months
1960 and later67

From the Social Security Administration website

If you start your Social Security benefit payments before your full retirement age, you will receive a reduced benefit. However, if you delay taking Social Security after your full retirement age, you increase your monthly benefit.

The increased benefit will vary based on the year you were born, and the monthly increase for each year you delay is between 3% and 8%.

It definitely pays to delay, but that's not possible for everyone.

Why do people take benefits early?

Whether you start receiving benefits early, at your FRA, or delay until you are 70 depends on your personal situation. Some people begin receiving benefits as soon as they turn 62 because they didn't want to work any longer, some people take it early because they can't work any longer, and some people take it early because they are sick and don't have the time to wait to receive that delayed benefit.

On the other hand, some people love their job and continue working well passed their FRA, some people don't need the money, and some people have a great family history of people living into their 90s and are currently very healthy, so they need to maximize their monthly income to make their money last.

Whatever reason you have to begin receiving your benefits early or delaying your benefits until you have to start taking them at 70 makes no difference to anybody else but yourself.

If you are sick of working, go ahead and start at 62, just know the benefit will be reduced. If you love your job or saved diligently for 40 years and don't need the money, delay until you're 70 years old.

Conclusion

When you begin your Social Security benefits is a 100% unique decision for you. Determine what is going to be best for you and your family, and if you have any questions, look at a previous post about this topic here, or give us a call.

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