Eligibility for Retirement Benefits
When you work and pay Social Security taxes (referred to as FICA on some pay stubs), you earn Social Security credits. Most people earn four credits per year. The number of credits you need to get retirement benefits depends on your date of birth. If you were born in 1929 or later, you need 40 credits (10 years of work). People born before 1929 need fewer than 40 credits (39 credits if born in 1928, 38 credits if born in 1927, etc.).
If you stop working before you have enough credits to qualify for benefits, your credits will remain on your Social Security record. If you return to work later on, you can then add credits so that you may qualify. No retirement benefits can be paid until you have the required number of credits.
If you are like most people, however, you will earn many more credits than you need to qualify for Social Security. While these extra credits do not increase your Social Security benefit, the income you earn while working will increase your benefit.
Amount of your retirement benefits
Your benefit amount is based on your earnings averaged over most of your working career. Higher lifetime earnings result in higher benefits. If you have some years of no earnings or low earnings, your benefit amount may be lower than if you had worked steadily.
Your benefit amount is also affected by your age at the time you start receiving benefits. If you start your retirement benefits at age 62 (the earliest possible retirement age), your benefit will be lower than if you wait until a later age.
Full Retirement
Persons in the Social Security system who retire at "full retirement age" receive the full retirement benefit. Your full retirement age depends on when you were born.
Because of longer life expectancies, the full retirement age increased from age 65 and increases gradual steps until it reaches age 67.
Early Retirement
You can start your Social Security benefits as early as age 62, but your benefit amount will be less than your full retirement benefit. If you take early retirement, your benefits will be reduced based on the number of months you will receive checks before you reach full retirement age. The reduction is 5/9 of one percent for every month before full retirement age. If your full retirement age is 66 (for example, one born in 1945 and retiring in 2007 at age 62), the reduction for starting your Social Security at 62 is about 27%.
Delayed Retirement
If you decide to continue working full-time beyond your full retirement age, you will increase your Social Security benefit in two ways:
- You will be adding a year of earnings to your Social Security record. (As stated earlier, higher lifetime earnings results in higher benefits.)
- Your benefit will increase by a certain percentage for each additional year you work. These increases will be added in automatically from the time you reach your full retirement age until you either start taking your benefits or reach age 70. The percentage varies depending on your year of birth. The chart below shows the increase that will apply to you.
| Year of Birth |
Yearly Rate of Increase |
| 1917-1924 |
3% |
| 1925-1926 |
3.5% |
| 1927-1928 |
4% |
| 1929-1930 |
4.5% |
| 1931-1932 |
5% |
| 1933-1934 |
5.5% |
| 1935-1936 |
6% |
| 1937-1938 |
6.5% |
| 1939-1940 |
7% |
| 1941-1942 |
7.5% |
| 1943 or later |
8% |
Example: If you were born in 1943 or later, your benefit will increase by 8% (2/3 of one percent per month) for each year you delay signing up for Social Security beyond your full retirement age.
Choosing Your Retirement Date
If you plan to start your retirement benefits at age 62, contact Social Security in advance to determine the best retirement month to claim your benefits. In some cases, your choice of a retirement month could mean additional benefits for you and your family.
If You plan to start collecting your Social Security when you turn 62, you should apply for benefits three months before the date you want your benefits to start. Because the rules are complicated, you should discuss your plans with a Social Security claims representative in the year before the year you plan to retire.
Benefits For Widows/Widowers
Many people do not realize that widows and widowers can begin receiving Social Security benefits at age 60 (or age 50 if disabled) on the deceased spouse’s account. If you are receiving widows/widowers (including divorced widows/widowers) benefits, you can switch to your own retirement benefits (assuming you are eligible and your retirement rate is higher than your widow/widower's rate) as early as age 62.
In many cases, a widow or widower can begin receiving one benefit at a reduced rate and then switch to the other benefit at an unreduced rate at age 65. Since the rules vary depending on the situation, talk to a Social Security representative about the options available to you.
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