Though your Social Security benefits are calculated based on your highest-paid 35 working years, the age at which you choose to file for them will determine the amount of money you ultimately collect each month in retirement. Seniors who accumulate enough credits during their working years can file for Social Security as early as age 62, and as late as age 70. In fact, you don't actually have to file at 70, but financially speaking, there's no reason to wait past that point.
Right in the middle of that eight-year window is full retirement age, or FRA. That age is a function of the year you were born, as follows:
Year of Birth
Full Retirement Age
66 and 2 months
66 and 4 months
66 and 6 months
66 and 8 months
66 and 10 months
Knowing your FRA is important, because it's the age at which you're entitled to your full monthly Social Security benefit based on your work record. Filing before FRA will shrink your benefits (and generally for life), while delaying benefits past FRA will boost them by 8% a year up until you reach age 70, at which point that incentive runs out (which is why 70 is generally considered the latest age to file).
Now you'll often hear pros and cons for claiming benefits at various ages. The advantage of filing at 62, for example, is getting your benefits as early as possible, but the downside is facing the largest reduction in benefits possible. Meanwhile, the upside of filing for benefits at 70 is increasing those monthly payments exponentially, while the drawback is having to wait a long time to start collecting them.
Filing for benefits at full retirement age, however, makes sense in a lot of different scenarios. Here are three good reasons to claim Social Security at 66, 67, or somewhere in between, depending on your specific FRA.
1. You won't shrink your benefits
Unless you enter retirement with an extremely robust nest egg, you'll probably end up relying on Social Security as a critical income source. As such, the last thing you'd want to do is reduce those benefits and collect a lower monthly payment for life. The great thing about waiting until FRA to file is that you won't have to worry about slashing your benefits and struggling financially as a result.
2. You won't have to wait too long to get benefits
It's hard to sit back and wait patiently to collect your benefits when you know there's a potential income source out there just waiting to be tapped. The good thing about taking benefits at FRA is that you won't face nearly the same wait as you would by delaying Social Security all the way until 70. Keep in mind that if you decide to continue working until you claim benefits at FRA, you can still look forward to a nice, long retirement, since life expectancies have increased for seniors and many are living well into their 80s and beyond.
3. You can work and collect your benefits in full
The Social Security Administration will allow you to work and collect benefits simultaneously, provided you're old enough to file. If you do so before reaching FRA, however, you'll have a portion of your benefits withheld once your earnings exceed a certain threshold that varies from year to year.
For 2019, that threshold is $17,640, and once your income surpasses that level, you'll lose $1 in Social Security for each $2 you earn. The only exception is if you're reaching FRA later this year, in which case that threshold increases to $46,920. After that, you'll have $1 in Social Security withheld for every $3 you earn. Once you reach FRA, however, you can earn as much as you'd like from a job and not have to worry about having benefits withheld, which is yet another good reason to wait until that point.
When it comes to Social Security, there's no right or wrong age to claim benefits. Ultimately, your decision should be based on your financial needs and other life circumstances. At the same time, it pays to consider the merits of taking benefits at FRA. If anything, it's a good middle-ground solution to an otherwise challenging decision.
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