It's hard to know everything there is to know about Social Security. Even experts on the program disagree about some of its fundamental aspects, and you'll find advice that spans the entire spectrum on certain key issues.
For instance, it might seem pretty straightforward to consider when you qualify to receive retirement benefits under Social Security. But even though there is a simple guideline that establishes when most people are eligible to claim benefits under their own work history, there are also plenty of other nuances to consider to have a complete answer to the question of when retirement benefits are available.
The simple answer to when you can claim retirement benefits
Nearly all people can claim Social Security retirement benefits once they turn 62. The primary exception is for those who don't meet the baseline eligibility requirements for Social Security.
Specifically, the Social Security program requires you to work long enough and make enough money to earn at least 40 Social Security credits over the course of your career. That usually takes people 10 years of qualifying work, which includes any wage or salary income on which you paid Social Security payroll taxes. Self-employment income also counts for the purposes of earning credits. With each credit taking just $1,360 in annual earnings for 2019, it doesn't take a high-paying job to earn the $5,440 necessary to collect the maximum of four credits per calendar year.
How different claiming decisions affect your benefits
Although you can claim retirement benefits at 62, you don't have to. In general, you can claim pretty much whenever you want after your 62nd birthday. However, there are a couple of key dates that are especially important for those expecting to claim Social Security to know.
First, full retirement age is the age at which the Social Security Administration calculates your regular retirement benefit amount. Claim retirement benefits before full retirement age, and you'll have to accept smaller monthly checks in exchange -- anywhere from 5% to 6 2/3% per year less. Claim after full retirement age, and you'll typically qualify to receive higher monthly benefit payments that are 8% larger for every extra year you wait.
What your full retirement age is depends on the year in which you were born. Those born in 1937 or before had a full retirement age of 65. That gradually rose two months per year for birth dates between 1938 and 1942 before stabilizing at 66 for those born between 1943 and 1954. Subsequently, full retirement age has been rising for those born from 1955 to 1959, and those born in 1960 or later have a full retirement age of 67.
Age 70 is the other key age for claiming retirement benefits. The delayed retirement credits you earn from waiting after full retirement age to claim stop accruing once you turn 70. At that point, it no longer makes sense to wait longer before claiming your Social Security.
The wild card of work
Finally, keep in mind that even though you can technically claim your retirement benefits when you're 62, it doesn't mean you'll actually get paid anything. Social Security has rules for how much recipients who are still working are allowed to earn from a job before having to forfeit the benefits they've received.
For 2019, someone who's younger than retirement age throughout the year can earn only a maximum of $1,470 per month -- $17,640 per year -- before starting to lose their benefits. For every $2 you earn above that annual threshold, you'll lose $1 in annual benefit payments.
It's possible to lose your entire Social Security check this way. For instance, if you have a $60,000 job and qualify for $1,000 in early retirement benefits, you'd get absolutely nothing from Social Security. $60,000 minus the $17,640 threshold equals $42,360, so you'd lose up to $21,680 in annual payments from Social Security. $1,000 per month in benefits is just $12,000, so the reduction would be more than adequate to leave you with nothing.
Fortunately, in this case, for every month of benefits you have to forfeit, you're treated as if you'd claimed your benefits a month later than you did. However, it can be a shock to have checks taken away, so it's best to know this is coming before it actually does.
Think about your retirement
It's easy just to figure you'll claim retirement benefits at the earliest possible age of 62. However, there's a lot more to the question than that, and knowing all the nuances can help you make a better decision when it's time to claim your Social Security.