Do you know your full retirement age for purposes of determining your Social Security retirement benefits? Full retirement age is the age at which a person first becomes entitled to full (unreduced) retirement benefits. For years, that age was 65. However, that age has been gradually increasing until it reaches 67 for people born in 1960 and later. You can, however, apply for benefits earlier at age 62, although your monthly benefit amount will be reduced nearly 26 percent compared to the benefit for your full retirement age.
Full retirement age is 66 and two months for people born 01/02/1955 through 01/01/1956. And these folks are eligible to receive permanently reduced retirement benefits when they turn 62 in 2017. You can find your full retirement age, along with other important information, on the Social Security Administration’s website.
The Social Security Administration recently shared these changes that are applicable in the year ahead:
- Social Security’s 60 million beneficiaries will get 0.3 percent more in monthly benefits. Retired workers will see a $5 bump on average to $1,360.
- The most a worker retiring at full retirement age in 2017 will receive is $2,687 per month, up $48 from 2016.
The amount of earnings subject to Social Security tax in 2017 will increase to $127,200, up from $118,500 this year. This tax hike will affect about 12 million of the 173 million people paying into the system.
- In 2017, for every $2 you earn above $16,920, one dollar of benefits will be withheld. In the year you reach your full retirement age, $1 of your benefits will be withheld for every $3 earned above $44,880. Once you reach full retirement age, Social Security will recalculate your benefits to give you credit for those withholdings.
- Previously, you could use a technique called “file and suspend” to claim your retirement benefit and then suspend it, allowing your spouse to receive benefits based on your record while your benefit continued to accrue. Some people were still able to do this for part of 2016, but no one can use this strategy in 2017.
You can learn more about the important decision of when to claim your Social Security benefit by reading Social Security’s publication, When to Start Receiving Benefits. Or better yet, you should consult your financial advisor if you are approaching the time to make that decision.