The full retirement age (FRA) for someone born in 1946 is 66, as determined by the Social Security Administration (SSA). This age is the benchmark at which you can begin to receive 100% of your calculated monthly Social Security benefit. The FRA is not a one-size-fits-all number; Congress passed legislation in 1983 to gradually raise the full retirement age based on birth year due to increased life expectancy. For those born from 1943 to 1954, the FRA is 66.
Early Retirement: Claiming at 62
While 66 is the FRA, you can choose to start receiving Social Security benefits as early as age 62. However, this option comes with a permanent reduction in your monthly benefit amount. For a person born in 1946, claiming at age 62 would reduce their monthly payment by 25% for the rest of their life. The SSA uses an actuarial reduction formula to calculate this decrease, which is a key factor to weigh when considering when to retire. Early claiming can provide a stream of income sooner, which may be a priority for some, especially if they are no longer working or need the funds for other expenses.
Factors influencing an early retirement decision
- Immediate Income Needs: If you are no longer employed and need money to cover living expenses, claiming early might be necessary.
- Health Concerns: Individuals with significant health issues or a shorter life expectancy might opt for early benefits to maximize total lifetime payments.
- Coordinating with a Spouse: One spouse might claim early benefits to provide an income stream while the other delays claiming to maximize their own, higher benefit.
Delayed Retirement: Claiming up to Age 70
If you can afford to wait, delaying your Social Security benefits past your full retirement age can result in a higher monthly payment. For every month you delay claiming after your FRA (age 66), your monthly benefit increases. For those born in 1946, the Delayed Retirement Credit is 8% for each year you wait beyond your FRA, stopping at age 70. Waiting until age 70 could result in a monthly benefit that is 132% of your full retirement benefit. This offers a substantial increase in income for the rest of your life, which can be a valuable hedge against longevity risk and inflation.
Benefits of delaying retirement
- Higher Monthly Income: The 8% per year increase can add up significantly, especially if you have a long retirement.
- Improved Survivor Benefits: A higher benefit for you also means a higher potential survivor benefit for your spouse.
- Better Financial Security: A larger guaranteed monthly income can provide greater peace of mind throughout your retirement.
The Role of Medicare Eligibility
Medicare eligibility begins at age 65 for most people, regardless of their Social Security claiming decision. For a person born in 1946, this means they became eligible for Medicare at age 65, one year before their full retirement age. This separation of eligibility ages means you must actively enroll in Medicare around your 65th birthday to avoid coverage gaps and potential late enrollment penalties, even if you are delaying your Social Security benefits.
Comparison Table: Retirement Options for a Person Born in 1946
| Feature | Early Retirement (Age 62) | Full Retirement (Age 66) | Delayed Retirement (Age 70) |
|---|---|---|---|
| Monthly Benefit | Permanently reduced by 25% | 100% of your Primary Insurance Amount (PIA) | Increases by 8% per year for each year delayed, up to 132% of PIA |
| Total Lifetime Benefits | May be higher for individuals with shorter life expectancy | The baseline for calculations; potential for good lifetime benefits | Higher monthly payments, potentially higher lifetime benefits for those with longer life expectancy |
| Income while Working | Benefits may be temporarily reduced if earnings exceed annual limits | No earnings limit; benefits not reduced due to work | No earnings limit; benefits not reduced due to work |
| Medicare Enrollment | Must enroll at 65 separately; not tied to Social Security benefits | Automatically enrolled in Part A if receiving Social Security at 65 | Automatically enrolled in Part A if receiving Social Security at 65 |
Conclusion
For someone born in 1946, the full retirement age is 66, at which they are entitled to 100% of their calculated Social Security benefits. However, this is just one of several options. Choosing to claim benefits early at age 62 results in a lower, permanently reduced monthly amount, while delaying beyond age 66 can lead to a significantly higher monthly payment for the rest of your life. When deciding on a retirement strategy, it is important to consider your personal financial needs, health status, and life expectancy. Furthermore, remember that Medicare eligibility and enrollment are separate processes, with enrollment generally beginning at age 65. Ultimately, the optimal choice depends on your individual circumstances and financial goals. For more detailed information, consult the Social Security Administration's official resources. https://www.ssa.gov/benefits/retirement/planner/1943.html
