Social Security retirement benefits can be a confusing topic for those preparing for retirement. When should I start taking Social Security withdrawals? What is the ideal age to start the withdrawals? How much benefit will I actually get while receiving Social Security?
There’s a lot of uncertainty when you’re first starting to learn about this subject, and the tough part is that none of us have any practice. You only retire once, so you’re really facing this for the first and only time. That’s why we want you to rely on us to help.
We’ve assisted hundreds of seniors to navigate Social Security benefits, and we’d love to be there for you, too.
What Will My Social Security Benefit Be?
As you may already know, your benefit depends on what age you decide to start taking withdrawals. This is all based on something called your “full retirement age.”
It used to be 65, but that number has changed depending on the year you were born. Beginning with people born in 1938 or later, that age gradually increases until it reaches 67 for people born after 1959. Full retirement age is 66 for people born between 1943 and 1954.
Regardless of your full retirement age, the earliest you can start receiving Social Security retirement benefits will remain age 62, and the latest you can start receiving benefits is 70.
The general rule of thumb is that if you can wait until your full retirement age, your monthly benefit will be higher, and if you start withdrawing earlier than your full retirement age, your benefit will be lower.
This chart gives you an example of how your benefit would change depending on when you start withdrawals:
In order to estimate your own retirement benefits, utilize the Retirement Benefits Calculator provided by the SSA.
What Should I Do If I Continue Working?
If you’re still working and don’t need to take Social Security benefits to support your finances, it may be worth waiting as long as possible. Remember that the longer you wait to start withdrawals, the higher the monthly benefit will be.
Additionally, if you continue working, you’re increasing your lifetime earnings, which slightly increases your benefits for future years.
If you need to start withdrawals, you can receive Social Security benefits while working. If you’re working and are under the full retirement age (see above), you’re going to earn a reduced amount from Social Security. This benefit reduction only applies when you’re working under the full retirement age. It has no effect on the amount you’ll earn in the future.
When you reach full retirement age, Social Security will recalculate your benefit to give you credit for the months you didn’t get a benefit because of your earnings.
In addition, as long as you continue to work and receive benefits, they’ll check your record every year to see whether the extra earnings will increase your monthly benefit.
Learn More About Social Security Retirement Benefits
If you want more of the nitty-gritty details, check out our article How Much Can You Make While Receiving Social Security?
There, you’ll find even more information on claiming early benefits, continuing to work, and more.
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