Your Social Security Options Based on Birth Year
For decades, the standard full retirement age (FRA) was 65. However, due to increased life expectancy, Congress passed legislation in 1983 to gradually raise the FRA. This change impacts everyone born after 1937, with the age incrementally increasing until it reached 67 for anyone born in 1960 or later. This means that for a person born in 1964, their full retirement age is definitively 67.
Early Retirement: Claiming at Age 62
While your FRA is 67, you can begin receiving Social Security retirement benefits as early as age 62. This offers flexibility if you need or want to retire sooner. However, taking benefits early comes with a significant and permanent reduction in your monthly payout. For someone with an FRA of 67, claiming at age 62 results in a benefit that is 30% less than the full amount. This reduction is permanent and will affect the benefit you receive for the rest of your life. The decision to claim early should be weighed carefully against your financial needs and anticipated lifespan.
Full Retirement Age: Claiming at Age 67
Claiming your benefits at your FRA of 67 ensures you receive 100% of the benefit amount calculated from your earnings history. This is often seen as the baseline option. You receive your full, unreduced benefit, which provides a solid income stream for retirement. For those born in 1964, this means you will reach your FRA in 2031. It's a balance between receiving your full benefit and potentially earning more by waiting longer.
Delayed Retirement: Claiming at Age 70
For those who can afford to wait, delaying your Social Security benefits beyond your FRA can significantly increase your monthly payments. The Social Security Administration provides delayed retirement credits for each month you postpone claiming benefits past your FRA, up to age 70. These credits result in an 8% increase per year. For someone with an FRA of 67, delaying until age 70 results in a 24% increase over your full retirement benefit. Once you reach age 70, the delayed retirement credits stop accruing, so there is no financial advantage to waiting longer.
Financial Impact: Weighing Your Options
Choosing when to start receiving Social Security is a personal decision with significant financial implications. The best choice depends on several factors, including your health, your need for income, and your overall financial situation. For example, if you are in poor health and expect a shorter lifespan, claiming early might make sense to ensure you receive benefits for as long as possible. Conversely, if you are healthy, have other retirement savings, and expect a long life, delaying to age 70 could result in a much higher lifetime benefit.
Comparison of Claiming Ages for a Person Born in 1964
| Age of Claiming | Percentage of Full Benefit | Key Consideration |
|---|---|---|
| 62 (Earliest) | 70% | Maximizes number of payments; lower monthly amount |
| 67 (Full Retirement Age) | 100% | Full monthly benefit; standard claiming age |
| 70 (Latest) | 124% | Maximizes monthly payment; fewest number of payments |
Considerations for Making Your Decision
Here are some key factors to help you determine the best claiming strategy for your situation:
- Other Income Streams: Do you have other retirement income, like a pension, 401(k), or savings, that can support you? If so, delaying Social Security might be a viable option.
- Spousal Benefits: Your claiming age can also affect your spouse's benefits. If you have a spouse who earned less, their benefit might be tied to yours. The higher your benefit, the higher their potential survivor's benefit.
- Health and Longevity: Your personal health is a major factor. If you or your family have a history of living to an old age, delaying for a higher payout might be a smart move.
- Continued Employment: If you plan to continue working, claiming Social Security early could result in a reduction of your benefits if your earnings exceed a certain limit. It's important to understand the earnings test rules if you plan to work while receiving benefits before your FRA.
How to Apply for Social Security
If you have decided on a claiming age, the process of applying for Social Security is straightforward and can be done online. Here's a general guide to the process:
- Gather Information: Before you apply, have your Social Security number, birth certificate, and bank information ready for direct deposit.
- Create an Account: Visit the official Social Security website and create a "my Social Security" account to view your earnings record and receive an estimate of your future benefits.
- Apply Online: The Social Security Administration (SSA) encourages most people to apply online, as it is the easiest and fastest way to complete the process. You can apply for retirement benefits in as little as 15 minutes.
- Consider Timing: You can apply up to four months before you want your benefits to start. Make sure you plan accordingly to avoid any gaps in your income.
- Review and Confirm: After submitting your application, the SSA will review it and notify you of their decision. You can also monitor the status of your application through your online account. For more information, visit the official Social Security website: ssa.gov.
Final Thoughts
The flexibility in claiming Social Security benefits is a powerful tool for retirement planning. For those born in 1964, the full retirement age of 67 is the benchmark, but early and delayed options offer different financial outcomes. By carefully assessing your personal and financial circumstances, you can make an informed decision that best suits your retirement goals.
