age to be retire from social security.
However, beginning with people born in 1938 or later, that age gradually increases until it reaches 67 for people born after 1959. The 1983 Social Security Amendments included a provision for raising the full retirement age beginning with people born in 1938 or later. The Congress cited improvements in the health of older people and increases in average life expectancy as primary reasons for increasing the normal retirement age. The government makes you wait until full retirement age in order to start collecting the full retirement payout that you've earned. So what's full retirement age? Good question. It used to be 65, but Congress voted in 1983 to raise it to 67 for everyone born in 1960 or later. For those workers born between 1938 and 1960, the full retirement age varies depending on your birth year. To find out yours, refer to the Social Security online retirement planner. Smart Idea - Use Tax Arbitrage to Your Advantage. Up to 85% of your Social Security benefits received can be taxed, but never 100%. This means that after taxes, a dollar of Social Security income is worth more than a dollar of IRA withdrawals. At age 62, your benefit amount is about 25 percent lower than your full benefit at age 66. If you delay receiving your Social Security until age 70, the monthly amount is 32 percent more than you would get at full retirement age. From 62 to 70, that comes to a monthly increase of $570 or $6,840 a year. For example: Let’s say your full retirement age for Social Security benefits is 66, and your monthly benefit at that age is $1,000. Here’s what your monthly benefit would be, starting at different ages: * Age 62 = $750. * Age 63 = $800. The formula that determines the taxation of benefits applies to everyone, regardless of age. If you look at a 1040 tax form you will see two boxes; box 20a for total Social Security benefits, and box 20b, for the taxable amount. Here's how the taxable amount is determined. Calculate the best retirement age to claim your Social Security benefits. En español | Let the Social Security Calculator help you figure out how much retirement income you’ll receive at different claiming ages so you can determine when you should claim Social Security. If your full retirement age is 67, your Social Security benefit is reduced by: 1  About 30 percent if you start collecting at 62. 2  About 25 percent if you start collecting at 63. 3  About 20 percent if you start collecting at 64.  About 13.3 percent if you start collecting at 1  65. About 6.7 percent if you start collecting at  66. Retirement Decisions. If you receive Social Security you may pay income taxes on up to 85% of your Social Security benefits. This rule about the taxation of benefits is different than the earned income rule, which applies if you receive benefits before your full retirement age, continue to work and earn amounts in excess of the earnings limit. Just be sure you budget for a reduced benefit. If your full retirement age is 67 and you begin collecting Social Security at age 62, for example, your benefits are reduced by about 30 percent. The reduction drops to 25 percent if you wait until you’re 63, and so on. The Social Security Administration provides a chart of retirement benefits by birth year.
66