What is my full retirement age for the Social Security maximum? | the motley fool (2023)

Full Retirement Age (FRA) is the age at which you can claim your standard Social Security benefit or Primary Insurance Amount (PIA).social insurance. Your PIA is the standard amount you can expect to earn based on your average inflation-adjusted salaries earned throughout your career. The full retirement age is 66 for those born in 1954 and 67 for those born in 1960 or younger; Varies depending on the year of birth.

Knowing your full retirement age is important because it affects when you can claim Social Security without reducing your benefits, the number of deferred pension credits you can earn to increase your benefits, and how much you earn You can get your benefits while you receive Social Security without losing any of your benefits

Complete Social Security retirement age table

The table below shows the full retirement age of people born on different dates.

What is my full retirement age for the Social Security maximum? | the motley fool (1)

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How does full retirement age affect your Social Security benefits?

If you claim your benefits at full retirement age, you will receive the standard amount of the Social Security benefit. If you submit your claim before the FRA, you will be subject to early filing penalties, which will reduce your benefit by the following amounts:

  • 5/9 of 1% for each of the first 36 months prior to FRA
  • 5/12 of 1% for each subsequent month prior to FRA

This equates to a 6.7% annual reduction for each of the first three years and an additional 5% reduction for each additional year before the FRA. If you claim benefits at age 62 with an FRA of 67, you should expect an overall benefit reduction of 30%.

Conversely, if you make use of servicesafterFRA receive 2/3 of 1% deferred pension credits per month. This translates into an 8% annual increase in your monthly performance. Deferred pension credits can be earned up to age 70, after which there is no financial benefit in deferring your eligibility. Delayed retirement credits cannot be drawn if you assert claimsspouseÖSurvivor Benefits.

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Frequently asked questions about working after full retirement age

retiredYou can work while receiving Social Security benefits, but those younger than your FRA are subject to the Retirement Income Test (RET).

If your income exceeds a certain limit on this test (which changes annually), you will temporarily lose some or all of your benefits. Once you reach full retirement age, your benefit will be recalculated and you may get most of that money back.

Can I work after full retirement age?

You can work past full retirement age and earn as much as you want without in any way affecting the level of your Social Security benefits.

How much can I earn if I work past full retirement age?

If you keep working after you reach full retirement age, you can work and earn as much as you want. You are not subject to the retirement income test and your Social Security benefits will not be affected.

If you worked before the FRA, you may lose some of your benefits if you earn more than the annual thresholds. However, your benefit amount will be recalculated at full retirement age to make up for most of this lost money.

Does working past full retirement age increase Social Security benefits?

If you work past full retirement age, you can increase your Social Security benefits. Your benefits are based on the average wage during your highest 35 earning years (adjusted for inflation).

Even after you have reached full retirement age, and even if you have already claimed benefits, the Social Security Administration will continue to recalculate your average annual salary to reflect new earnings. If your earnings after the FRA are higher than in previous years and your average earnings are increasing over the top 35 years, your benefits may increase accordingly.

Other key questions about full retirement age

There are a few other important things you may need to know about full retirement age.

Do survivor benefits increase after full retirement age?

If you are the surviving spouse claiming benefits based on your deceased spouse's employment history, waiting until after the FRA to claim your benefits will not benefit you. You do not acquire any deferred retirement credits, so your benefit will not increase.

However, if you are the higher earning spouse, defer your entitlement to benefits until after the FRAallowed toresults in your widow(s) receiving more monthly earnings as your widowed partner receives the higher of the two monthly benefits each of you received.

Are Social Security benefits taxable at full retirement age?

Your age does not affect whether you owe taxes on Social Security benefits. Depending on your income, you can pay federal taxes on Social Security benefits, regardless of how old you claim them.

Social Security benefits are taxable on amounts in excess of the "Provisional Earnings Limit" specified by the IRS. To calculate your provisional income, add up all non-Social Security sources of income, including non-taxable income such as interest on municipal bonds, and include one-half of your annual Social Security income.

Single applicants with interim income between $25,000 and $34,000 and married joint applicants with income between $32,000 and $44,000 must owe income taxes on 50% of their Social Security benefits. For single taxpayers with interim income over $34,000 and married taxpayers over $44,000, up to 85% of Social Security benefits are taxable.

Retirement issues

Everything You Need to Know About Social Security BenefitsThis government program supports those who need it by using funds from certain taxes.
Collect Spouse Social Security Benefits You may be able to collect Social Security benefits based on your spouse's employment records. That's how it goes.
Working while on Social Security Working and receiving Social Security benefits? it gets complicated
Choosing the best pension plan for you Which pension plan is right for you and your needs?

Is your full retirement age affected by where you live?

Your FRA is not affected by where you live. Most Social Security regulations, including those that determine benefit levels and eligibility ages, are set by federal law. However, some states tax Social Security benefits where you liveallowed toaffect the taxation of your retirement income. But again, the age at which you start receiving benefits doesn't affect your tax rate — your income is the key factor.

expert advice

What is my full retirement age for the Social Security maximum? | the motley fool (2)

Jialu Streeter, PhD,

A research fellow at the Stanford Center on Longevity

The Motley Fool: Because of the COVID-19 pandemic, many Americans are now worried they won't be able to retire. What's your advice to someone worried about retirement due to recent financial setbacks?

road map:

  1. First, I would suggest that the person and their family do a thorough review of all of their assets and debts, including home ownership, mortgages, student loans (including those of your children if they co-signed), loan balances, retirement plans, and other reviews and savings accounts. accounts
  2. Second, it is important to understand the impact of retirement age on Social Security benefits. For some people who are in good health and can afford to defer Social Security, it might be better to do so in order to receive higher benefits for the rest of their lives. Third, the individual or family should have an honest conversation about the type of retirement they envision. For example, will they travel a lot? Will they eat out or cook at home?
  3. Finally, the risk of longevity. If they survive their wealth. People need to get all of these dots together to see if they are on their way to their projected retirement life.

The Motley Fool: In 2019, the average retirement account savings of American households was $65,000, and the average American under the age of 35 had $13,000 saved for retirement. Why do you think this average is so much lower than what experts would normally expect of Americans?

Streeter: Only about half of American adults have access to company pension plans like 401(k). Second, people are in school longer and later start saving for retirement. Third, many people simply follow the lower "standard" retirement saving rate.

The Motley Fool: There are no hard and fast rules about when we should retire or how much we should have saved, but what three pieces of advice would you give to someone just opening their first retirement account?

road map:

  1. Start saving early.
  2. Save more than the standard price.
  3. Maximize your retirement contribution if you expect your retirement income to be lower than your current income, and of course if it doesn't interfere with your other financial goals.

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