Social Security Full Retirement Age: How New Rules Impact Earnings in 2024

Phoenix, Arizona – Understanding your Social Security Full Retirement Age (FRA) is crucial for planning your retirement benefits. The FRA, determined by the year of your birth, ranges from 65 to 67. For individuals born between 1938 and 1942, FRA is 65 with additional months. Those born between 1943 and 1959 have an FRA of 66 with additional months, while those born 1960 or later have an FRA of 67.

There are two main reasons why FRA is important to grasp. First, it is the age at which you can collect full Social Security benefits without any penalty for collecting before reaching FRA. Secondly, it is the age at which you can earn unlimited income and still collect Social Security without facing any penalties.

For those who have not reached their FRA, the rules for earning income without penalty are as follows: You can earn up to $22,320 without any penalty to your benefit. However, if you retire during the year, the rules are relaxed and your earning limits do not begin until after you retire. As long as you do not exceed monthly earnings of $1,860 or perform substantial services while self-employed, you will not face any penalties. If you earn more than that, you will be penalized $1 for every $2 that you earn over the limit. It’s important to note that these rules also apply to the Social Security Special Supplement, which is the secondary pension paid out to federal retirees under age 62 who meet the age and service requirements.

Reaching your FRA has its benefits as well. If you reach your FRA this year, you are permitted to earn $59,520 without penalty in the months leading up to reaching your FRA. Earning amounts over this will result in a penalty of $1 for every $3 that you earn over the limit. However, once you reach your FRA month, all earnings limits and penalties are lifted.

It’s important to note that all income referred to on the chart only applies to earned income, such as income from employment, and does not include income from pensions, annuities, capital gains, rental properties, or any other type of income.

Understanding your FRA and the regulations surrounding earning income before and after reaching FRA is essential for making sound financial decisions about your benefits and retirement. It’s crucial to have a clear understanding of the rules and limits in order to maximize your benefits and ensure a secure retirement for yourself.

For further information and guidance on federal retirement benefits, individuals can seek advice from specialists who are well-versed in navigating the complexities of Social Security and retirement planning. By staying informed and seeking professional assistance, individuals can take the necessary steps to make informed decisions about their retirement and financial well-being.