I don’t spend a lot of time writing about Social Security because I’m only in my early 30’s. If the topic of Social Security comes up with my friends, it’s usually followed by disparaging comments about how it’s underfunded and won’t exist in thirty years when I’m eligible to start receiving it (which probably isn’t that far off). Sadly, the solvency of Social Security is (mostly) simple math. New workers contribute, older retirees withdraw, and the system works similar to a Ponzi scheme, except everyone knows it. The tricky part comes when you start messing with the contributions, such as with the payroll tax cuts , or you don’t leave the contributions alone.
When the money starts looking tight, you can always start pushing out the “full retirement age.”
Full Retirement Age
Your full retirement age depends on the year you were born. If you were born in 1937 or earlier, your full retirement age  is 65. As the years pass, the full retirement age goes up. If you were born between 1943 and 1954, the full retirement age is 66. 1960 and later? Full retirement age is 67. The full retirement age is the age at which you will receive 100% of your eligible benefits if you start taking Social Security then. You can take Social Security payments as early as 62 but the benefits are significantly reduced.
If your full retirement age is 67 then this is how much of your full retirement age benefit you would receive monthly:
- At 62 – You’d receive around 70% of full benefits
- At 63 – 75% of full benefits
- At 64 – 80%
- At 65 – 86.7%
- At 66 – 93.3%
If you don’t need the benefits and want to delay  it beyond full retirement age, you can get an increase up to the age of 70 (after 70, you can still delay but you receive no increased benefit). If you were born 1943 or later and delayed it for one year, you’d get 8% more (or 2/3rds of 1% on the monthly benefit).
If you can wait, it’s often best to wait until full retirement so you don’t give up your benefits. If you are married, one of you can start taking benefits early while the other waits until full retirement. There are probably plenty of articles out there explaining “Social Security strategy” but they all start with full retirement age.
Hopefully this is something I can worry about in thirty-plus years. 🙂