Scenarios about Age of Retirement
Scenario
Retirees who are full retirement age or older will not have benefits reduced if they reenter the workforce. Retirees who have not yet reached full retirement age, however, will have their Social Security benefits reduced until they reach their full retirement age. The amount of this reduction depends on the total amount of new earnings each year. For example, your godfather is a 70-year-old man who retired 5 years ago with Social Security as his only source of income. Rising property taxes, however, are making it difficult to make ends meet, so he is considering getting a part-time job to supplement his income. Since he has already reached full retirement age, any outside income he earns will not reduce his Social Security retirement benefits.
Scenario
Individuals who begin drawing Social Security retirement benefits before reaching their full retirement age receive a reduced monthly benefit for as long as they draw benefits. For example, your uncle is a 61-year-old man who would like to retire next year and begin drawing his Social Security retirement benefits early. If he does so, he will receive a lower monthly benefit than he would if he waited until his full retirement age to being drawing benefits.
Scenario
Individuals who begin receiving Social Security benefits before reaching full retirement age will have their monthly benefit permanently reduced. For example, your 60-year-old aunt has been anxiously counting down the months until she can retire. She recently discovered that she won’t be eligible to receive full Social Security retirement benefits until she is 66. She is considering retiring early, at age 62, and taking a reduced monthly Social Security retirement benefit for the duration of her life.
Scenario
People who wait until after their full retirement age to begin drawing retirement benefits will receive an increased monthly benefit based on how long they wait. For example, your grandfather is 61 years old. He loves his job and hates the idea of sitting around the house all day, so he does not intend to retire anytime soon, despite the urgings of his wife and children. He has decided to delay beginning to receive Social Security retirement benefits until he is 69 or 70. He discovered that for people born in 1943 or later, the Social Security Administration will add 8% per year to his benefits for each year that he delays signing up for benefits beyond his full retirement age (which is 66), up to age 70.