Social Security’s “Magical” Age

The “magical” age for Social Security benefits is full retirement age, currently 66 years, but that number is gradually increasing based on date of birth.

At full retirement age, you’re eligible to:

  • Receive 100% of your retirement benefit.
  • Keep working without an earnings limit and still receive 100% of your retirement benefit.*
  • Use special claiming options if you’re married or divorced (if qualified) such as spousal benefit, file and suspend, and restricted application. These options may help you increase your Social Security payments markedly.

Full Retirement Age Is Based on Birth Year

Full retirement age, the age when you are eligible for 100% of your retirement benefit, has been increasing since 1983. As the chart shows, for people born between 1943 and 1954, 66 is the magic age. For each year after 1954, full retirement age increases by two months. For people born in 1960 or later, full retirement age is 67.

Retirement Chart OppenheimerFunds

Claiming Ages

You can claim Social Security benefits as early as age 62 or wait until you’re 70. If you claim early, your monthly payment will be reduced. For every year you wait after age 66 (up to age 70), you gain an 8% delayed retirement credit. If you wait till you’re 70, your monthly payment will be 132% of the age 66 benefit.

Many investors postpone claiming Social Security until after full retirement age to earn the 8% delayed retirement credit and use other income sources to bridge the gap.

Call your financial advisor today to find out how Social Security can best fit into your financial plan.

* If you start collecting before full retirement age and continue to work, Social Security withholds $1 in benefits for every $2 you earn over the earnings limit. Likewise, during the year you reach full retirement age, Social Security withholds $1 in benefits for every $3 you earn over the limit until the month of your birthday. For more details, visit www.ssa.gov to download “How Work Affects Your Benefits.”