Retirement benefits are not paid automatically. You should file for Social Security retirement benefits three months before you want to start receiving benefits. The age for receiving full Social Security benefits, traditionally 65, was increased for those born after 1937. For those born in 1943–1954, you must be age 66 to receive full benefits ; see the Law Alert on this page. Reduced benefits may be elected if you are at least age 62. The reduction for starting benefits early depends on the number of months between the start date and your full Social Security retirement age. For example, if you were born in 1951 and elect benefits at age 62 in 2013, the benefit reduction is 25%. Even though your full Social Security retirement age is over 65, you should register with the Social Security Administration three months before the month in which you turn age 65 to ensure Medicare coverage.
If you were born in 1943 or later and delay benefits beyond full Social Security retirement age of 66, your Social Security benefit increases 8% for each year you delay retirement. The increase for delaying benefits no longer applies once you reach age 70.
If you are under full retirement age and are receiving benefits, $1 of benefits will be deducted for each $2 earned above an annual limit. In 2012, the limit was $14,640 (the 2013 limit will be listed in the e-Supplement at jklasser.com ). For the year you reach full retirement age, $1 of benefits is deducted for each $3 earned over a different limit. For example, if in 2012 you reached the full Social Security retirement age of 66, benefits were reduced $1 for every $3 of earnings over $38,880, but only earnings before the month in which you reached age 66 are counted. Starting with the month in which you reach full retirement age, you are entitled to full benefits with no limit on how much you may earn.
There is also a favorable rule for the first year of retirement. A full benefit may be received for any month in which your earnings do not exceed 1/12 of the annual limit, even if the yearly limit is exceeded. However, this special rule does not apply for any month in which you are self-employed and devote over 45 hours to the business, or between 15 and 45 hours in the case of a highly skilled profession.
Birth year— | Full Social Security 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 and after | 67 |
So long as you continue to work, you pay Social Security taxes on your earnings, regardless of your age, so the additional earnings can increase your benefits. In addition, after you reach full retirement age, you will be given credit for any months in which you did not receive a benefit because of your earnings.
Regardless of your age, you may receive any amount of income from sources other than work—for example, pensions or investments—without affecting the amount of Social Security retirement benefits.
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