As you reach retirement age, you'll have to make a decision about when to claim Social Security. Your choice affects the income you -- and your spouse -- receive for the rest of your life.
Unfortunately, many people make this decision without the most crucial piece of information. You don't want to be one of them, so you should take a look at the table below. It's the most important table you'll ever see because it arms you with the details necessary to start your benefits at the best age to maximize the retirement money you receive.
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This table is crucial to determining when to claim Social Security
This table is the most important Social Security table that you will ever see -- for one simple reason. It lets you know your full retirement age (FRA).
| Birth Year | Full Retirement Age |
|---|---|
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 or later | 67 |
Data source: Social Security Administration.
So why is this table so important? It's because you must start getting checks at exactly your full retirement age to receive your standard Social Security benefit. And this can be confusing for some people who assume, wrongly, that 65 is the optimum time to claim benefits
See, 65 used to be full retirement age for everyone. But that hasn't been the case for a long time. Changes to FRA were put in place in 1983 and phased in over time. As a result, those with later birth years must wait longer to get their full Social Security benefit.
If you don't know this and end up filing for benefits sooner than you should, you could cost yourself money and face other consequences as well.
Why does full retirement age matter for Social Security?
Once you know your full retirement age, you can decide on the best time to claim Social Security between the ages of 62 and 70. That's because you can better understand how your timeline affects income.
See, anyone who gets a payment even a month before FRA is subject to early filing penalties equaling 5/9 of 1% for the first 36 months and 5/12 of 1% for any prior month. This adds up to a 6.7% annual reduction in benefits for each of the first three full years you get payments ahead of FRA and another 5% per-year reduction if you've claimed before then. Anyone who delays filing, on the other hand, earns a delayed retirement credit worth 2/3 of 1% per month for each month of waiting. This adds up to an 8% annual benefit increase.
Now, you have the option to start your payments at exactly FRA. But if you don't want to do that because you'd rather get benefits sooner or you'd prefer to wait to maximize monthly income, you're going to have to prepare for how your check amount will be affected based on your claiming age. It's absolutely crucial you know when FRA is so you can determine your best option, since any reduction (or increase) to your Social Security benefit is permanent throughout retirement.
You should also know that if you work before FRA while collecting Social Security, you can end up forfeiting some or all of your retirement benefits temporarily. This can happen if you earn too much. If it does, your check amount will be recalculated at full retirement age. For any month you missed a payment due to earning too much, you'll be credited back the early filing penalty that would've otherwise applied. Your future benefits will thus be a bit higher.
Unfortunately, you can't understand how working will affect your benefit or make an informed choice about when to start checks without knowing your FR. And that's why the table showing your full retirement age is the most important Social Security table of all.
