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What Age is Best for Collecting Social Security Benefits?

The exact age that you should begin collecting payments for social security retirement income can make a big difference in your monthly payments and the amount of money that you can collect over the course of your entire lifetime. By maximizing your social security benefits, you might be able to enjoy a more comfortable retirement and make the most of the system that you have probably been paying into all of your working life. However, the decision is personal and unique for everybody.

First, consider the rules to consider for determining full retirement age, or FRA:

  • Born before or on 1937:  Age 65
  • Born between 1938 and 1942: Full retirement age gradually rises in increments
  • Born between 1943 and 1955: Age 66
  • Born in 1956 or later: Age 67

Note that early retirement, or the earliest age to collect benefits is 62 for everybody. The oldest that you can be when you begin collecting benefits is age 70. The longer you delay, the greater your monthly payments will be. The earlier you take income, the lower the payments you will have. The theory behind this is that an “average” social security beneficiary would collect the same amount in total no matter how old they are.

This is because the government bases payments on actuarial tables with average life expectancies. In this way, social security payments are determined in a way that is similar to the way that life insurance rates are determined. Actually, it might be more fair to compare social security to a retirement income annuity. However, unlike a policy that might actually use your own health or lifestyle in its calculations, social security benefits are based upon averages.

Example of Collecting Social Security Early, Late, or On Time

In order to make the topic easier to consider, consider a simple example. This is just an example, you will need to get the exact numbers for yourself from the Social Security Administration, or SSA. This handy online retirement calculator might be helpful. This is also for an individual collecting income based upon their own earnings who was born from the late 1940’s to early 1950’s.

  • Early at 62: Payments are about 75 of FRA
  • Early at 65: Payments are about 93 percent of FRA
  • Age 66: Full benefits
  • Deferred after FRA: Additional payment of about 8 percent for each year of delay after FRA

These numbers and examples were derived from this page on the official Social Security Administration Retirement Planning web page.

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