Full Retirement Age Continues to Rise
- Full retirement age is 66 and four months in 2018
- There has been a two month increase to the retirement age in 2019
- There are penalties for claiming early
- There are bonuses for claiming late
There are some common misunderstandings on when someone can start claiming Social Security retirement benefits so this post will (hopefully) clear that up for those looking to claim Social Security this year.
For starters, despite what you may have heard, claiming Social Security at 62 years old is still possible, but, not without paying a “price.” Although the earliest one can claim Social Security benefits is 62 it does not mean that anyone can claim and at the full benefit amount. In 2019, claiming Social Security benefits before full retirement age has been reached comes with a penalty. This penalty is in the form of the payout being reduced permanently which can come as a shocker to many.
So, where does the difference lie?
Full retirement age is 66 and four months For those who turned 62 in 2018. It is 66 and six months for those turned 62 in 2019. The retirement age is set to increase by two months each year until it hits 67. This is reflective of the law currently but, like any other law, things can always change.
Now here is where things can get interesting. Just like there is a penalty if you claim early, on the opposite end of the spectrum, there is a “bonus” if you claim late. Delaying the process of collecting Social Security past the full retirement age makes one eligible to collect more than the full, or normal, payout. For example, if you put off claiming until age 70, a 76% higher annual payout can be received than if you started receiving benefits at 62. Beyond age 70, there are no additional incentives for delaying so it’s best to avoid this if possible.