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The Social Security Retirement Age, 62 or 70?

Contrary to the doom and gloom scenarios tossed about by many politicians, most Americans alive today will probably receive social security benefits during their retirement years. Of course the amount and the eligibility age may get adjusted to keep the system solvent.

Social security benefits are calculated based on a complicated formula taking into account inflation-adjusted top 35 years of earnings, applying a few multipliers, and capping it to a maximum figure to arrive at the full monthly social security benefit amount.

To be eligible for the full benefit amount, one has to be at the full retirement age as defined by the Social Security Administration. Currently that age is 66 years old. On year 2021 the full retirement age begins to increase by two months every year until the year 2027 when full retirement age will be 67 years old.

social security retirement benefits are available to people starting at the age 62, however their monthly benefits are reduced by a certain amount to compensate for the advance payments. For example currently a 62 year-old is eligible to receive 75% of his full social security benefits. With every passing month of waiting-before-filing that amount increases until the age 66 when the person can expect the full benefits (100%).

But wait, there's more. A person does have the option for wait beyond her full retirement age to begin collecting social security benefits. For every month delayed, the person gets a fractional percentage increase over the full benefit. Currently for every year delayed beyond the age 66, that amount is an additional 8% until the age 70 when the increased social security benefit tops out at 132% of the full benefit. That could be a substantial amount, specially for those at the top end of the benefits.

So should you apply for social security benefits at the age 62 or wait until you are 70. Opinions differ and various scenarios have been considered when one strategy wins over others based on certain assumptions. In the end the best strategy is the one a person is most comfortable with. But it's good to know that at 62 a working person has earned the right to start receiving social security benefits.

For more information visit the Social Security Administration Retirement Web site.

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