Early Retirement and Benefits Reductions
Does early retirement appeal to you? Are you counting on your Social Security benefits as all or part of your retirement income? Then understanding the effect that early retirement has on your benefits is essential.
Regardless of what year you were born, you can retire at age 62 and receive Social Security benefits. But your full retirement age is determined by your year of birth and taking retirement before your full retirement age will reduce your benefits for every month between 62 and full retirement.
For instance, if you were born in 1944, your normal, or full retirement age is 66. If you retire this year at 62, you will retire 48 months early. You would suffer a 25% reduction in your monthly benefit. If your monthly benefit would have been $1000 at age 66, it will be reduced to $750 due to collecting your benefits before your full retirement age. In planning for early retirement, these reductions need to be calculated and considered carefully.
To figure the reduction that would be applied to you, see the chart at the Retirement Planner at the Social Security Administration’s website.
(does the math)…I think I got a while, but you can’t blame me for checking
By Janus on September 8th, 2006 at 12:50 pm
It’s never too early to think about saving for retirement and calculating what you will need in the way of income when you get there. If you began at age 23 to privately invest the money you pay into social security, by the time you retired you would be a millionaire.
By Andrea on September 8th, 2006 at 3:52 pm