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What is The Full Retirement Age?
The full retirement age basically refers to the age that you must attain to be eligible for full or 100% Social Security benefits. Traditionally, the full retirement age used to be age 65 but this has been increasing gradually since Congress amended the law in 1983. As such, your full retirement age will depend on when you were born.
If you’re a baby boomer born in 1964, your full retirement age is set at 67. This means that you will attain the full retirement age in 2031. This, however, doesn’t mean that you have to wait until your full retirement age to start accessing your Social Security benefits. Well, your Social Security starts at 62. You can start accessing your Social Security benefits at the age of 62, which will be in 2026 if you were born in 1964.
However, your Social Security benefits will be greatly reduced if you retire at the age of 62 and start claiming Social Security benefits immediately.
With that in mind, here are a few things that you need to know.
- While you can start accessing your Social Security benefits at the age of 62, your benefits will be permanently reduced. You’ll receive your Social Security benefits at 70% of the full benefit amount. This is, of course, a major downside of retiring early.
- You will receive 70% of your Social Security benefits if you were born in 1964 and start claiming these benefits in 2026.
- If you choose to continue working, your benefits check will be reduced by $1 for every $2 that you earn over a given amount. This amount was $17,640 in 2019.
- You’ll get 100% of your Social Security benefits if you were born in 1964 and only start claiming these benefits at the age of 67, which is in 2031.
- Your Social Security benefits will increase by varying percentages each year and max out at the age of 70 if you start claiming these benefits after 67.
Early Retirement Comes with Reduced Benefits
As noted earlier, the amount of Social Benefits that you get will precisely depend on when you start claiming these benefits. Here is how it works.
- You’ll be eligible for 100% of your benefits if you retire at the age of 67 (which is in 2031 for those born in 1964).
- Your benefits will be reduced by 6.7% if you retire at the age of 66 (which is in 2030 for those born in 1964).
- Your benefits will be reduced by 13.3% if you retire at the age of 65 (which is in 2029 for those born in 1964).
- Your benefits will be reduced by 20% if you retire at the age of 64 (which is in 2028 for those born in 1964).
- Your benefits will be reduced by 25% if you retire at the age of 63 (which is in 2027 for those born in 1964).
- Your benefits will be reduced by 30% if you retire at the age of 62 (which is in 2026 for those born in 1964).
Now, let’s put it into perspective. Say you’re eligible for a Social Security benefit of $2,000 per month at your full retirement age of 67, this benefit will be reduced to $1,400 a month if you start claiming the benefits early at the age of 62. The amount will be $1,500 a month if you start claiming at 63, $1,600 if you start claiming at 64, $1,734 if you start claiming at 65, and so on.
Claiming Your Benefits after Full Retirement Age
On the other hand, you’ll be rewarded with a bigger check if you start claiming your Social Security benefits after your full retirement age. These delayed retirement benefits will accumulate monthly and max out when you attain the age of 70. This means that there will be no further benefits or incentives for waiting to claim your Social Security benefits after the age of 70.
Let’s break it down.
- Your monthly benefits will increase by 24% if you start claiming your Social Security benefits at the age of 70 (which is in 2034 for those born in 1964).
- Your monthly benefits will increase by 16% if you start claiming your Social Security benefits at the age of 69 (which is in 2033 for those born in 1964).
- Your monthly benefits will increase by 8% if you start claiming your Social Security benefits at the age of 68 (which is in 2032 for those born in 1964).
Here’s an example. If you supposed to get a Social Security benefit of $2,000 per month at your full retirement age of 67, your monthly benefit will be $2,160 per month if you start claiming the benefits at the age of 68, $2,320 per month if you start claiming the benefits at the age of 69, and $2,480 per month if you start claiming the benefits at the age of 70.
Delaying the Benefits is a Good Idea
From the above-discussed figures, it’s easy to see that delaying accessing your Social Security benefits at least until your full retirement age or even after will be more beneficial. This is because you will get 100% of your Social Security benefits rather than getting reduced checks as a result of retiring early.
It’s even more important if you earn higher than your partner and try delaying claiming these benefits as long as possible. This is because the amount you earn in your retirement years will determine the survivor benefit that your surviving partner will earn when you die.
So while many people retire and start claiming their Social Security benefits almost immediately, you can consider delaying claiming the benefits. However, you can still choose to retire and delay claiming the benefits until your full retirement age or even after.
You can as well tap into your other retirement savings to help you delay claiming the Social Security benefits. You can also choose to continue working either full-time or part-time as a way of delaying claiming the Social Security benefits. You can even sign up for Medicare but still delay claiming your Social Security benefits.
How much will You Need to retire if you were Born in 1964?
It doesn’t matter whether you were born in 1964, earlier or later, answering the question “when can I retire?” is not just about your Social Security benefits. In most cases, your Social Security benefits won’t be enough to provide for a comfortable retirement that many Americans dream of.
The idea here is that Social Security benefits only equates to 40% of your earnings later in your career. This is far much less and can’t even replace half of your income. For this reason, you most certainly need another source of income to supplement your Social Security benefits.
With that in mind, the amount that you need to retire comfortably depends on the lifestyle that you choose to lead during your retirement. So if you were born in 1964, you can retire at any time you wish as long as your finances permit. If not, you can wait to retire in 2026 when you’ll be 62 and even consider delaying claiming the benefits until 2031 when you’ll be 67.
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