Chicago, Illinois – Many Americans approaching retirement age may not fully understand their eligibility for Social Security benefits at age 62. It’s important for people to realize the factors that determine the benefits they can expect once they reach retirement age.
The Social Security Administration uses a formula based on a person’s 35 highest-paid years of work to calculate their primary insurance amount (PIA). This amount is the benefit a worker will receive if they collect Social Security at full retirement age, which is currently 67 for those born in 1960 or later.
It’s crucial to note that the PIA is recalculated yearly, as a person’s work history is updated. This means that retirees have the opportunity to increase their benefits by working longer and therefore increasing their average lifetime earnings.
According to Social Security Administration data, 22.9% of men and 24.5% of women chose to start collecting Social Security benefits at the age of 62 in 2022. However, it’s important to understand that those born after 1960 who claim their benefits at 62 will only receive 70% of what they would have received had they waited until the full retirement age of 67.
The monthly retirement payment also fluctuates depending on when a person starts collecting benefits. For example, those who wait until they’re 67 will receive 100% of the full benefit, while waiting even longer will result in additional credits until the age of 70, when the delayed retirement credits stop.
It’s essential for individuals approaching retirement age to understand the implications of when they choose to start collecting their Social Security benefits. Proper planning and understanding of the factors at play can make a significant difference in a person’s retirement income.