Today we’re talking about the Social Security Normal Retirement Age, also called the Full Retirement Age, which is between ages 65 and 67 depending on the year you were born. When you begin drawing Social Security retirement benefits, the amount you will received each month will depend on whether you start before your normal retirement age, at that age, or after.  If you were born before 1937 your Normal Retirement Age is 65. If you were born in 1960 or later, your Normal Retirement Age is age 67. Everybody else, yours is in-between age 65 and 67. Check out your exact Normal Retirement Age in years and months on the Social Security website https://www.ssa.gov/oact/progdata/nra.html.

I highly recommend you go to the Social Security website if you haven’t already, and establish an account. https://www.ssa.gov/site/signin/en/ You’ve been earning Social Security credits based on your earnings record. Your employers have been withholding Social Security and Medical taxes from your pay and reporting to Social Security what they paid you each year. You want to be sure these earnings records are accurate. Your retirement benefit will be based on your highest 35 years of income, so every year is important.  Log into ssa.gov once a year and compare what earnings they recorded for last year with your tax documents to and make sure it’s accurate, or correct any mistakes. The website will also give you estimates of future payments. Find out how much you would qualify for if you become disabled, what your family members would receive if you die, and what your Social Security retirement benefits would be.

Your Normal Retirement Age. is the age you can start receiving your full Social Security retirement benefit. The formula used to compute it is very complicated, but its’s easy to see the amount when you log into your account. Everyone eligible can apply and begin receiving benefits anytime from age 62 to age 70. But if you start early you receive less each month. Start later and you receive more.  As an example, if you were born in 1990. Your Normal or Full Retirement Age is 67. You want to begin receiving Social Security retirement benefits at age 62. That’s 5 years early, so your monthly benefit would be reduced by 30%. If you full retirement benefit is $2,000 a month, you would receive only $1,400 a month if you start at age 62. You could choose any age between 62 and 67. But the earlier you begin benefits, the lower the payments.

For each year you delay benefits after your full retirement age up to age 70, your benefit will increase by 8% year. That’s huge. In our example. For someone with a full retirement benefit of $2,000 a month, if you delay receiving benefits until you’re age 70, your payment will be $2,480 a month. Looking at the yearly amounts, you could retire with $16,800 a year at 62, $24,000 a year at 67, or $29,760 starting at age 70. 

How do you decide when to start drawing benefits? It depends on your situation. Will you have enough resources to live on while you delay? Delaying is a low risk way of getting a higher benefit. How long will you live? Just from a numbers perspective, the longer you live the better off you are delaying benefits. One of the biggest concerns when planning for retirements is making sure you don’t run out of money before you run out of life. Delaying drawing Social Security can help prevent that. If your health is poor and  and you think you will die younger than average, it may be better for you to start benefits earlier. Taxes can also impact your decision. Your Social Security benefits are taxed when you other taxable income crosses certain thresholds.