For millions of Americans, Social Security retirement benefits will play a significant role in their retirement planning budget. If you are one of these, you may be wondering at what age you should retire and start accepting your benefits. Because it actually matters, the Overland Park retirement planning attorneys at Parman & Easterday explain how the age at which you begin accepting Social Security retirement benefits will impact your benefit amount.
The Social Security Retirement System
Throughout your working years you accumulate credits based on your earnings. The Social Security Administration keeps track of your earnings throughout your lifetime. In 2019, you get one credit for every $1,360 you earn, up to a limit of four credits per year. The amount you need to earn to acquire a credit increases slightly each year. Once a credit is earned it remains on your record forever. If you were born after 1929, you need 40 credits in order to receive Social Security retirement benefits. Consequently, you must work a combined total of 10 years over the course of your lifetime to be eligible for Social Security retirement benefits. You do not have to work 40 consecutive quarters – you just need to have a total of ten years, or 40 quarters, worth of work history to be eligible for benefits.
At What Age Can I Retire?
The issue isn’t at what age can you retire, but at what age should you retire and begin collecting Social Security retirement benefits. You can stop working at any age you choose. The earliest age at which you can begin receiving Social Security retirement benefits, however, is age 62 and the latest is age 70. You may choose to begin anywhere in that eight year span. Many people choose to delay the start of their retirement benefits until they are older than 62 because the longer you wait to start receiving payments the larger your monthly payments will be when you do – and they will stay at that rate forever.
How Much Will I Receive in Social Security Retirement Benefits?
Your monthly benefit amount depends on such things as the age at which you begin receiving benefits and your earnings during the time period prior to retirement. You can find out how much you have paid in and get an estimate of what your benefit will be by going to the Social Security Administration’s website. In addition, the Social Security Administration (SSA) mails out a summary of your benefits each year about three months before your birthday. Or you can request a statement at any time by calling the SSA at 800-772-1213 and asking for form SSA-7004 or by downloading the form from the SSA website. Your statement is a record of your earnings history, the number of credits you’ve accumulated to date, and an estimate of the retirement benefits available if you wait until full retirement age.
There is a maximum retirement benefit amount that changes each year. For 2019, the maximum Social Security retirement benefit amount is $2,861. To be eligible for the maximum benefit amount, however, you would have had to earn the maximum taxable earning amount for at least 35 years. The average monthly benefit for “all retired workers” in 2019 is estimated to be $1,461.
Why Should I Delay My Retirement?
If you retire early, your retirement benefit amount will be reduced and if you retire after your designated retirement age your benefit amount will be increased. By way of example, if you were born in 1957, meaning you will turn 62 in 2019, your retirement benefit amount would be reduced by 27.5 percent if you retire in 2019 at age 62. Conversely, your retirement benefit amount is increased by 8 percent for every year you delay receiving benefits up to age 70. For most people, that means your benefit amount could be increased by 24 percent by retiring at age 70 instead of age 67. Keep in mind that the increase in your benefit amount will remain with you for the rest of your life.
Contact Overland Park Retirement Planning Attorneys
For additional information, please join us for an upcoming FREE seminar. If you have additional questions or concerns regarding when to retire or at what age to start collecting Social Security retirement benefits, contact the experienced Overland Park retirement planning attorneys at Parman & Easterday by calling 405-843-6100 to schedule your appointment today.