When it comes to Social Security, there's a lot to know about the best time to claim benefits and about techniques to maximize your check amount. But the most important fact of all is when you can claim your full benefit without losing some of the money because of early filing penalties.
The age when you're entitled to your standard benefit varies based on your birth year. Since you absolutely must know this information, the table below showing your full retirement age is the most important Social Security table you'll ever see.
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You need to understand this table to know when to claim benefits
When Social Security was first created, seniors had a "full retirement age" of 65. This meant that at the age of 65, they could get their primary (aka standard) benefit. This is a payment equal to a percentage of average wages earned over their 35 highest-earning years.
But 1983 amendments changed full retirement age, so it's not 65 for everyone anymore. Other rules related to FRA remained in effect, though. Specifically, a claim before FRA results in a reduction in the standard benefit while a claim after FRA results in an increase to it. And you will still get your primary insurance amount only if you start getting checks right at FRA.
Because these rules are in place, knowing your FRA is crucial so you can decide if you want to file right at that age, opt for an earlier payout but smaller checks for life, or delay claiming to increase your monthly check. So if you don't know your FRA yet, you cannot make an informed choice on when to claim Social Security benefits.
The good news is, the table below will show what your retirement age is so you can make this important decision.
|
Birth Year |
Full Retirement Age |
|---|---|
|
1943-1954 |
66 |
|
1955 |
66 and 2 months |
|
1956 |
66 and 4 months |
|
1957 |
66 and 6 months |
|
1958 |
66 and 8 months |
|
1959 |
66 and 10 months |
|
1960 or later |
67 |
Data source: Social Security Administration.
How to use the FRA table
By referencing the table above, you can determine how long you need to wait to claim Social Security in order to get your primary insurance amount.
You can also estimate how your monthly check would be affected by an early or late claim. For each month up to 36 months that you receive benefits before FRA, your standard benefit is reduced by 5/9 of 1%. And if you get benefits more than 36 months early, there's an additional reduction of 5/12 of 1% per month. On the other hand, for each month you wait beyond FRA, your benefits increase by 2/3 of 1%.
If your FRA is 67, you can thus calculate that claiming Social Security at 62 would reduce your check by 30%, while delaying benefits until the age of 70 would increase it by 24%. Knowing this can help you decide whether you're comfortable with such a big reduction in your payments if claiming at 62 allows you retire early -- or whether you'd rather put off your payments for years in hopes of a much larger payout later.
Now that you know your FRA thanks to this important table, you're armed with the information you need to make a knowledgeable, informed choice about what Social Security claiming strategy is really right for you.
