A:

On August 14, 1935, U.S. President Roosevelt signed into law the Social Security Act, a social insurance program designed to pay retired workers a continuing income. Over the years, Social Security has evolved to pay four different types of benefits:

  • Retirement
  • Disability
  • Family
  • Survivors

Most American workers include Social Security as part of their retirement plans. As you work and pay Social Security (FICA) taxes, you earn “credits” toward Social Security retirement benefits. In general, you need 40 credits, or about 10 years of work, to be eligible to receive Social Security retirement benefits. The amount of your benefit is based on how much you earned while working, and the age at which you begin receiving benefits.

The earliest you can start receiving Social Security retirement benefits is when you turn 62, but your monthly amount will be permanently reduced. Your full retirement age is the age at which you can start collecting full or unreduced benefits (the maximum payout), and it is based on the year in which you were born. The following table shows the full retirement age for various birth years:

Birth Year

Full Retirement Age

1937 or earlier

65

1938

65 and 2 months

1939

65 and 4 months

1940

65 and 6 months

1941

65 and 8 months

1942

65 and 10 months

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 later

67

You will receive close to the same lifetime benefit whether you start receiving benefits at age 62, full retirement age, or age 70 if you live to the average life expectancy for someone your age. That’s because if you start early, you will receive lower monthly payments for a longer period of time, and if you delay benefits, you will receive higher monthly payments for a shorter period of time. The Social Security Administration web site has a Retirement Planner that gives detailed information about retirement benefits under current law. You can find information on your life expectancy, how your family members may qualify for benefits, and use benefit calculators to test different retirement ages or future earnings amount. Check it out at www.ssa.gov/retire2.

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