Social Security

Why should I wait past age 62 to start collecting?

This gets complicated – hang in there. The government makes you wait until “full retirement age” in order to start collecting the full retirement payout that you’ve earned. If you were born before 1960, full retirement age is 67. For those workers born between 1938 and 1960, the full retirement age varies depending on your birth year. To find out yours, refer to the Social Security online retirement planner.

How much will your benefits be curtailed if you opt to collect before full retirement age? That depends on when you were born. For example, if you were born between 1943 and 1954, your payouts will be reduced 25% if you start receiving benefits at age 62. That reduction is permanent – that is, the 25% reduction applies not only to the money you collect between age 62 and 67, but all the money you’ll collect for the rest of your life.

To figure out the reductions based on your age, check out the online table published by the Social Security Administration.

What if you wait longer? It gets even better! Your benefits payment goes up 8% for every year after full retirement age that you delay collecting payments. Until you turn 70, of course – that’s the longest you can delay. There’s no benefit to delaying past age 70; you’d just be throwing money away.

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