1. WHAT IS “NORMAL” RETIREMENT AGE?
Up until 1999, the normal age, i.e. the age when a person received full SS benefits, was 65. In 2000 this age increases gradually until it reaches age 67 as the “normal” age. In 2013, we are at the level of birth years 1943 – 1954 your “normal” age to collect full benefits is 66.
2. HOW MUCH DO I LOSE IF I RETIRE EARLY?
Those who start SS benefits at age 62,63, or 64 receive a reduced amount throughout retirement. For example, if Joe, born in 1960, when full retirement reaches age 67, decides to retire at 62, he will receive 70% of full benefits throughout retirement.
3. SUPPOSE I GO BACK TO WORK?
As of April 7, 2000, there is no SS earnings test for seniors aged 65-69 – unless the person retired early. REMEMBER – Even if you are drawing Social Security, you will still be subject to full SS and Medicare tax withholdings if you return to work.
4. HOW MUCH MORE DO I GET FOR WAITING?
Social Security benefits, which are based on lifetime earnings as well as retirement age, increase by a set percentage each year a retiree waits up to age 70, after which there is no increase. For those born in 1943 and later will see benefits increase by 8%. EXAMPLE: Joe, who was born in 1937, could have retired in 2002 at age 65 and collected benefits of $1,200/month. If he had waited until he was 66, his benefits would have been $1,278/month; had he waited until age 79 it would have gone to $1,590/month.
This example does not take into effect, the additional increases from COLA’s.
5. CAN MY SOCIAL SECURITY BENEFITS BE TAXED?
Yes, depending on non-Social Security income. There is a formula used when your tax return is prepared to compute the taxable SS amount. It can up taxed up to 85% of the gross amount of Social Security received.
