Definition and Example of Full Retirement AgeFull retirement age is the age at which you can receive full, unreduced Social Security benefits. If you collect benefits before reaching your full retirement age, those benefits are reduced. Show
For example, if you start collecting benefits at age 62, the earliest age at which you can collect, you could see up to 30% reduction in full benefits. If you delay benefits until after your full retirement age, your benefits are increased thanks to delayed retirement credits. These credits can increase your benefits by up to 8%. How Does Full Retirement Age Work?Full retirement age is not the same age for everyone. Understanding when you will reach full retirement age depends on the day and year you were born. Although full retirement age once was 65 for everyone, Congress passed a law in 1983 that gradually increased it to age 67, because people were living longer.
Not only does FRA depend on the year you were born, but it also depends on the day, because Social Security considers you to have attained an age the day before your birthday. Therefore, if you were born on January 1, you would use the FRA for the year before your year of birth. For example, someone born on January 1, 1956, would use 1955 as the year to figure their full retirement age, as they would be considered to have attained an age (in this case, 66) on December 31 of the previous year (1955). According to the Social Security Administration, full retirement age for those with 1955 as an official birth year would be 66 years and two months; therefore, that is their retirement age, even if they were actually born in 1956. NoteFor purposes of the month you are entitled to receive benefits, if you were born on the first of the month, you are considered to attain that age the month before. Someone born on February 1 would be entitled to receive their FRA benefit amount for the month of January. If you are applying for a widow or widower's benefit, the earliest age you can receive these benefits is age 60, when you would receive a reduced benefit. For example, someone born at any time from 1945 through 1956 would reach their full retirement age for a survivor's benefit at age 66. If you take Social Security benefits before FRA, and you earn income in excess of the annual earnings limit, your Social Security benefit will be reduced. Once you reach FRA, you can earn as much as you like, and your Social Security benefit will not be reduced. NoteSocial Security is separate from Medicare. Although age 65 is frequently referenced when referring to Medicare, your full retirement age may be something different. For couples, in many cases having the spouse who earned the most wait until full retirement age or later to begin benefits can result in a serious boost to survivor benefits. If you're married, be sure to coordinate your claiming decision to put the two of you in the most secure position. Key Takeaways
Retirement Read Time: 4 min In a recent survey, 70% of current workers stated they plan to work for pay after retiring.1 And that possibility raises an interesting question: how will working affect Social Security benefits? The answer to that question requires an understanding of three key concepts: full retirement age, the earnings test, and taxable benefits. Full Retirement AgeMost workers don't face an "official" retirement date, according to the Social Security Administration. The Social Security program allows workers to start receiving benefits as soon as they reach age 62 – or to put off receiving benefits up until age 70.2 "Full retirement age" is the age at which individuals become eligible to receive 100% of their Social Security benefits. Individuals born in 1960 or later can receive 100% of their benefits at age 67. Earnings TestStarting Social Security benefits before reaching full retirement age brings into play the earnings test. If a working individual starts receiving Social Security payments before full retirement age, the Social Security Administration will deduct $1 in benefits for each $2 that person earns above an annual limit. In 2022, the income limit is $19,560.2 During the year in which a worker reaches full retirement age, Social Security benefit reduction falls to $1 in benefits for every $3 in earnings. For 2022, the limit is $51,960 before the month the worker reaches full retirement age.2 For example, let's assume a worker begins receiving Social Security benefits during the year he or she reaches full retirement age. In that year, before the month the worker reaches full retirement age, the worker earns $65,000. The Social Security benefit would be reduced as follows:
In this case, the worker's annual Social Security benefit would have been reduced by $4,347 because they are continuing to work. Taxable BenefitsOnce you reach full retirement age, Social Security benefits will not be reduced no matter how much you earn. However, Social Security benefits are taxable. For example, say you file a joint return, and you and your spouse are past the full retirement age. In the joint return, you report a combined income of between $32,000 and $44,000. You may have to pay income tax on as much as 50% of your benefits. If your combined income is more than $44,000, as much as 85% of your benefits may be subject to income taxes.2 There are many factors to consider when evaluating Social Security benefits. Understanding how working may affect total benefits can help you put together a strategy that allows you to make the most of all your retirement income sources – including Social Security. 1. EBRI.org, 2022 The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright FMG Suite. How do I find out my full retirement age?The law raised the full retirement age beginning with people born in 1938 or later. The retirement age gradually increases by a few months for every birth year, until it reaches 67 for people born in 1960 and later.
What is the full retirement age at 66?Currently, the full benefit age is 66 years and 2 months for people born in 1955, and it will gradually rise to 67 for those born in 1960 or later. Early retirement benefits will continue to be available at age 62, but they will be reduced more.
How much money can you earn after you reach full retirement age?In the year you reach full retirement age, we deduct $1 in benefits for every $3 you earn above a different limit. In 2022, this limit on your earnings is $51,960.
How do you find out how much Social Security you will receive?Your Social Security Statement (Statement) is available to view online by opening a my Social Security account. It is useful for people of all ages who want to learn about their future Social Security benefits and current earnings history.
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Born in 1956 what is my full retirement age
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