Q&A: Social Security Benefits and Retirement Age

How does my age at retirement affect my Social Security benefits?

If I start my Social Security retirement benefits at age 63, is the amount I would get the same as at age 62?

If you retire at any time between age 62 and full retirement age, your benefits are reduced a fraction of a percent for each month before your full retirement age. The following examples show how your benefit will be reduced if you retire between age 62 and full retirement age.

If your full retirement age is 66 (persons born in 1943 to 1954) the reduction for starting your retirement benefits at 62 is about 25 percent. The reduction for starting benefits at age:

  • 63 is about 20 percent;
  • 64 is about 13 percent; and
  • 65 is about 7 percent.

If your full retirement age is 67 (persons born in or after 1960) the reduction for starting your retirement benefits at 62 is about 30 percent. The reduction for starting benefits at age:

  • 63 is about 25 percent;
  • 64 is about 20 percent;
  • 65 is about 13 percent; and
  • 66 is about 7 percent.

To examine different retirement scenarios, check out the “Retirement Estimator” feature on the Social Security Administration website (socialsecurity.gov).

Also, note that persons younger than full retirement age may have their Social Security retirement benefits cut if they earn more than a specified amount. To illustrate, in the year you reach full retirement age, your monthly Social Security retirement benefits are reduced by $1 for every $3 you earn above a specified amount ($3,140 per month for 2011). No reduction in Social Security benefits occurs for income earned in the month full retirement age is attained (and all future months). Persons who begin receiving Social Security retirement benefits prior to the year in which they reach full retirement age will have their benefits reduced by $1 for every $2 of earned income in excess of a specified amount. For 2011 this annual amount is $14,160.

Richard R. Hammar is an attorney, CPA and author specializing in legal and tax issues for churches and clergy.

This content is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. "From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations." Due to the nature of the U.S. legal system, laws and regulations constantly change. The editors encourage readers to carefully search the site for all content related to the topic of interest and consult qualified local counsel to verify the status of specific statutes, laws, regulations, and precedential court holdings.

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