The Most Crucial Social Security Chart You’ll Ever See

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As you approach retirement age, you will have to decide when to begin collecting Social Security. Your decision impacts the income you and your spouse will receive for the remainder of your lives.

Sadly, many individuals make this choice without the most vital piece of information. You don’t want to be one of them, so you should review the following table. It is the most important table you will ever see because it equips you with the information you need to maximize your retirement income by starting your benefits at the optimal age.

 

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Historically, the full retirement age for everyone was 65. However, this has not been the case for quite some time. Changes to FRA were implemented gradually beginning in 1983. Consequently, those born later must wait longer to receive their full Social Security benefit.

If you do not know this and file for benefits earlier than you should, you could lose money and face additional consequences.

 

WHY IS THE AGE OF FULL RETIREMENT IMPORTANT FOR SOCIAL SECURITY?

Once you have determined your full retirement age, you can determine the optimal time to file for Social Security between 62 and 70. Because you have a better understanding of how your timeline impacts your income.

Those who receive a payment even one month before FRA are subject to early filing penalties of 5/9 of 1 percent for the first 36 months and 5/12 of 1 percent for any month prior. This amounts to a 6,7% annual reduction in benefits for each of the first three full years you receive payments prior to FRA, and an additional 5% annual reduction if you began receiving benefits prior to FRA. In contrast, anyone who delays filing receives a delayed retirement credit equal to two-thirds of one percent per month for each month of waiting. This amounts to an annual benefit increase of 8 percent.

Now, you have the option to begin making payments at FRA. But if you don’t want to do that because you’d rather start receiving benefits sooner or you’d rather wait to maximize your monthly income, you’ll need to consider how your check amount will be affected by your claiming age. Since any reduction (or increase) to your Social Security benefit is permanent throughout retirement, it is crucial that you know your FRA in order to determine your best course of action.

You should also be aware that if you work prior to your FRA while receiving Social Security, you may temporarily lose some or all of your retirement benefits. This can occur if your income is excessive. If so, the amount of your check will be recalculated using your full retirement age. For each month in which you missed a payment due to excessive income, the early filing penalty that would have otherwise applied will be refunded. Thus, your future benefits will be increased.

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Without knowing your FR, you cannot comprehend how working will impact your benefits or make an informed decision about when to begin receiving payments. Consequently, the table displaying your full retirement age is the most crucial Social Security table.

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