If you are a senior who is close to retiring, you may have some questions regarding the age of retirement. The amount of Social Security benefits you get will depend on the age you retire. Although retiring at the full-retirement age of Social Security is not obligatory, there are certain things you have to consider if you are planning to retire before the average or if you want to delay it. In this article, we will explain everything related to the age of retirement.
How does Social Security work with retirement?
When you are working, you are paying Social Security taxes, which will go into a trust fund and it will pay your benefits when you retire in the future. Every year you work, you are getting “credits” that you are going to need to qualify for Social Security benefits when you decide to retire.
To get Social Security benefits, you need at least 40 credits, and you won’t be paid any retirement benefits until you accumulate them. These credits will remain in your Social Security record, so if you stop working they stay there and if you continue working in the future, the credits you earn in your new job will be added to the one you already had.
What is the retirement age in the U.S?
Even though retiring is not an obligation, there are certain ages for Social Security in which you will be able to get your retirement benefits. They will depend on the year you were born. In 1028, the ages of retirement are:
- The full retirement age is 66 if you were born between 1943 and 1954. After that, the age of retirement increases by two months each year of birth until 1967 or later, when the age of retirement is 70. So, for example, if you were born in 1955, your age of retirement is 66 years and two months.
- The early retirement age is 62, so it is possible to retire before 66. However, if you do it, your benefits will reduce. The amount of money you will receive will be approximately 26.7% lower than if you retired when you are 66.
- In the past, the full retirement age was 65, the same as the age required to apply for Medicare. However, the age required to join Medicare is still 65, so be careful and remember to join Medicare although you are going to retire that year.
You should apply for Social Security retirement benefits four months before you expect to start receiving them.
What happens if I decide to retire early?
If you decide to retire between 62 and 65 years old, you will get a smaller amount of benefits for the rest of your life. You also have to consider that you will have to be the one who completely pays for the health care costs if you don’t have your work’s insurance anymore. This can be really expensive and you will have to do it for a couple of years as you must be 65 to apply for Medicare.
In case you stop working due to health problems, you should consider applying for Social Security disability benefits. You will receive the same amount of money as if you retired at the full retirement age.
What happens if I decide to delay my retirement?
The higher the age of retirement, the higher the benefits. If you decide to wait more to retire you will receive more benefits. This occurs because each extra year of working adds a year of earnings to your Social Security benefits, and they are calculated based on your higher years of earnings.
Additionally, benefits will increase a certain percentage from the full retirement age to 70 years or the age in which you decide to retire. Percentages will depend on the year you were born.