Many people count on social security to be part of their retirement income, but often don’t know the details or how much to expect. Following are several frequently asked questions regarding this program:
What determines how much social security I’ll receive when I retire?
There are two main factors that determine the monthly benefit that you will receive: you’re earnings throughout your working career and the age you begin receiving your benefits. You are eligible to receive benefits at the age of 62, but they will be reduced according to your retirement age, which is based on your birth year, the earlier you begin to take retirement, the lower your benefit will be.
What is the best age to begin receiving social security benefits?
This is a decision that should be based on your personal situation. It should be weighed carefully whether it would be better to receive benefits early with a smaller monthly amount or wait for the larger monthly benefit payment at a later date. Some of the factors to consider in this decision are:
Other retirement income sources;
- Whether or not you plan to work part time or full time during your retirement.
- Your health;
- Your financial needs; and
- The amount of your benefits.
What is the difference between the monthly benefit at 62 and the monthly benefit at full retirement age?
The earliest you may begin collecting benefits is age 62. If your estimated full benefit amount is $1,000, you would receive approximately $750 at age 62, $1,000 at your full retirement age (which differs based on the year of your birth) and approximately $1,300 at age 70. These benefit amounts would not normally change throughout your retirement years, unless you are working during retirement. In that case, after you reach full retirement age, social security reevaluates your benefit amount to give you credit for any months in which you did not receive your full benefit because of your earnings.
How can I find out how much my monthly benefits would be from social security when I retire?
The Social Security Administration mails this information annually. In your Social Security statement is the estimated monthly benefit amounts you and your family may qualify for now and in the future. This information is based on your earnings and years worked, and changes during your lifetime.