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When Should I Start Receiving Social Security?

For Maryland seniors, age affects benefits

Seniors can begin taking social security retirement benefits from the time they turn 62. Taking benefits early is one of a few options seniors have when deciding when to draw from their social security retirement. It’s important that seniors understand these options, and the effect it will have on their retirement planning, as the range in monthly benefit amount will vary widely depending on when the benefit is taken. The options for retirement age are:

  • early retirement at age 62
  • full retirement at age 66 or 67
  • delayed retirement up until age 70

The Social Security Administration (SSA) indicates that a good rule of thumb for benefits is: If a senior needs the social security benefit money, take it; if a senior can afford to wait, take it later. They also claim that the total amount of benefits a retiree will receive should work out about the same regardless of whether they take the benefit early or late. Factors to weigh in determining when to take the benefit include:

  • Current health of the retiree
  • Retiree’s family health history
  • Financial condition of the retiree
  • Marriage status of retiree

What is full retirement age?

Seniors will receive their full benefit amount if they retire and apply for social security at their full retirement age. Under the current law, full retirement age for anyone born in 1960 or later is 67 years old. For those born before 1960, the full retirement age occurs sometime during their 66th year.

Early retirement

Seniors can begin receiving social security retirement benefits as early as age 62. However, for someone turning 62 in 2018, their benefit will be reduced 26.7 percent from the full retirement age benefit. However, the amount of the reduction decreases each month the senior gets closer to full retirement age.

Delayed retirement

Seniors can also choose to work beyond their full retirement age, and delay taking their benefit. If retirement is delayed until age 70, the retiree can expect an increase of approximately 30 percent of their full retirement monthly benefit amount.

For example, if your full retirement benefit amount is $1,000, taken at age 66 or 67, an early or delayed benefit amount will be:

  • $733 monthly benefit amount if taken at age 62
  • $1,300 monthly benefit amount if taken at age 70

Delaying retirement the full eight years beyond early retirement at age 62 amounts to a benefit amount nearly double the early retirement benefit. Delayed retirement credits end at age 70, so there is likely no incentive to delay beyond then.

How are social security retirement benefits calculated?

Once someone has worked for ten or more years, that person has gained eligibility for social security retirement benefits. The monthly benefit amount a senior will receive once retired is based on their lifetime earnings; the higher the earnings, the higher the benefit amount. To calculate their benefit, the SSA looks at the retiree’s 35 highest earning years and uses a formula to arrive at a monthly benefit amount. Seniors should use the SSA retirement estimator to calculate their estimated benefit well in advance of retirement to get an understanding of how much they will receive.

The SSA cautions that social security retirement is only one part of a proper retirement plan, which should also include income from pensions or retirement accounts, savings and, potentially, part-time employment. Seniors nearing retirement should contact an experienced Maryland elder law attorney to determine the best time to apply for social security retirement.

For more information on this area, see our overview of elder law and estate planning.

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