What is the significance of SS full retirement age?

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The websites all say something like, "Full retirement age (FRA) is the age at which someone can receive their full Social Security retirement benefits". But benefits increase even after until age 70. So the way I look at it, FRA doesn't really mean much.

But I have also read that before FRA, there is a limit to how much income you can make without losing some SS benefit. That to me is the real significance. But how is it calculated? On an annual basis? Monthly? Bi-weekly? So if you make a $100k in 2024, any money you get from SS in 2024 is reduced? What if you stop working in 2024? Should you wait till 2025 to begin receiving SS benefits?
 
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Just went through all of this so getting the booklet from SSA is very helpful and answered a lot of questions. Also seek out a tax specialist that deals with Social Security and how it will impact you income and tax-wise. Basically, I retired this year and could make up to $22.5K this same year before my retirement benefits were reduced (I took early benefits at 62). Until I am full retirement age (67), I can only make up to $1800 per month from wage paying employment before my benefits are reduced. And for every $1 over $1800, my benefits are reduced by $2. When I turn 67, I can make any amount and it will not impact my benefits. I currently have 2 pensions that I receive that do NOT count toward income relative to receiving my benefits.
 
My full retirement age is 66 1/2. I'm trying to decide to take it then or wait a year or 2 longer for the additional 8% a year.
The reason I'm considering waiting is because my wife will get my larger benefit if I croak but I can't tell if her larger benefit would be capped at my 'full retirement' (66.5 years) benefit or the larger one if I wait a year or two longer. I can't seem to find the answer on line and when I called SS the agent didn't seem to understand my question. Does anybody know for sure if the spousal benefit is capped at 'full retirement' benefit or if it is based on the amount of my benefit when I die even if that's above 'full retirement' amount?.
 
If you were born 1960 or later, your FRA is 67.
You can start collecting SS at 62.
For every year you start before FRA you lose 8%.
That is permanent. You still get the COLA.
For every year you wait after FRA you get an extra 8%, up to 70.

If you start early, you will get more money until 80-81 yrs of age, after that you would get more by waiting until FRA or later.
 
Does anybody know for sure if the spousal benefit is capped at 'full retirement' benefit or if it is based on the amount of my benefit when I die even if that's above 'full retirement' amount?.
I can't remember where I read it.

Your benefit will be reduced to her retirement date.
You working longer will only benefit her if she works longer.

My wife worked a extra year and her benefit is quite a bit larger than mine.
I left 4 yrs early.

First thing they will do is take the extra year away, then reduce her benefit by the 4 yrs I retired early.
That will make it pretty close to what I get.
 
My full retirement age was 66 1/2 and I pulled the plug at that time due to the company I worked for was making some major changes. I didn't do any work at all for over 2 years and now work for a large automotive dealership 20 hours per week and love it. I still buy stocks on the side and feel very happy working part time. Everyone's situation is different and you have to figure out what is the best option for your situation. Many people die before 70 which is sad too because some try to wait it out for that extra 8% while they kick the bucket prematurely. Plus, working part time gives you the opportunity to enjoy some good years of your life before your health goes down the drain. I am very active but something can happen and it's game over. Nothing in life is guaranteed to work out perfectly. You have one problem and get it taken care of another problem starts...that's life folks.
 
FRA is just the mathematical point where your benefits are neither penalized or boosted due to your age. As you point out it does affect the max amount you can earn working before losing benefits. The max earning amount is different for the year you retire than from subsequent years, and seems like December birthdays are yet another special case . The best move is to schedule an appt at a SS office and discuss your specific plans with them.

If you break through the earnings limit, SS will "withold $1 of benefits for every $2 over the limit you eared. This is only for earned wages. Pension and investment income doesn't count. My experience in overearning was that in about May or June after I filed my taxes they sent a letter demanding repayment by a certain date in the fall or my benefits would be witheld. A kind lady at the SS office said they sound threatning but the best thing was to ignore the letter and just let them withhold the benefits. There was no penalty or interest involved, and the repayment processing office was so behind that even if you sent a check they might not process it before the deadline. Bottom line was that about 14 months after the end of the year I overearned they didn't send a monthly benfit for about 3 months.

The max earning amount before FRA was a serious deterrent to me for working. I got caught having to finish a long job one time and I calculated that toward the end, after I paid regular income taxes and then lost SS benefits equal to 50% of the overearning, it put me in what was essentially an 80% tax bracket. I could stay home and enjoy 100% of my time.
 
My full retirement age is 66 1/2. I'm trying to decide to take it then or wait a year or 2 longer for the additional 8% a year.
The reason I'm considering waiting is because my wife will get my larger benefit if I croak but I can't tell if her larger benefit would be capped at my 'full retirement' (66.5 years) benefit or the larger one if I wait a year or two longer. I can't seem to find the answer on line and when I called SS the agent didn't seem to understand my question. Does anybody know for sure if the spousal benefit is capped at 'full retirement' benefit or if it is based on the amount of my benefit when I die even if that's above 'full retirement' amount?.
One of the reasons I delayed until 70 was I thought my wife's benefit would be larger if I kicked the bucket before she did. Misconception on my part. I've since learned her benefit would be based upon my FRA amount, not FRA plus the 8% a year.
One good thing about delaying is that the additional 8% per year of delay is inflation adjusted via the COLA multiplier. The big COLAs the last 2 years were especially nice when multiplied by my FRA amount plus 32% (delayed starting from 66 FRA to 70).
 
if you're younger than full retirement age, and earn more than certain amounts, your benefits will be reduced. The amount that your benefits are reduced, however, isn't lost. Your benefit will increase at your full retirement age to account for benefits withheld due to earlier earnings.
 
Everyone's situation is different. Current health, family history (longevity) as well as need all come into play. The break even point is around age 77-78 when comparing taking benefits at 62 versus 70. There's no use waiting till later if family memebers don't make it past 70. I likely will take it between 62 and 65 even though my FRA is 67.
 
I took mine early for anticipated health reasons. Family history rarely has expectancy much past 70 and I have already had a few severe health issues. Did the math and figured I would have to live until 78 1/2 before collecting the reduced benefits at 62 equaled what the higher benefit would pay if I waited until 67. And thats IF Social Security is still around 😁. Not worried about spousal benefits when I go as I have a VERY lucrative life insurance plan that will pay her (or my son) handsomely if I take my dirt nap before 80.

And I got the benefit withholding reversed in my previous post, every $2 earned income withholds $1 in benefits.
 
The mature American man's average age at death is now 73.2 years. Down a bit from the past.

Women live longer than men, on average about 7 years. Interestingly, this number varies greatly, with some groups of women living as much as 12 years more! On a serious note, women are genetically superior, with XX chromosomes providing backup genetic information. It helps explain why unhealthy men seem to perish early, as we can't combat damage.

Also, by age 65, fully 25% of your male peers have died.

I've struggled with health issues for decades, and while I hope to have a long and fun retirement, reality has a way of ruining my plans :ROFLMAO:
 
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FRA - is an age that Social Security removes any restrictions on income that you can earn. In addition you can keep on working and collect even more until you reach the mandatory retirement age which at that point you will start collecting whether you like it or not.

The following is my personal thoughts on one of the most discussed topics full of misinformation and "expert" opinions. I mean, "the people" need something to debate right? We over complicate things though.
I see it this way.
1. You can afford to retire or not at age 62 if retirement is on your mind
2. You enjoy working and dont really want to retire yet

Everything else is just "static" in my view of things. Trust me, I did go through the same thought process of all thoughts and forums and research and after all is said and done it comes down to the first two questions #1 & #2 above.

Me? I retired at age 63, took a part time 25 hour job in a bank because I love working with people, I just didnt want to work so hard plus my wife has a few years to go until the same age.
In addition I didnt want the drain of paying health insurance for two years. So, the bank paid all my health insurance, paid holidays and PTO which equaled 5 weeks PTO with weekends off, 5 hours a day, got to meet and talk with the public. Perfect for me.
On top of that, I didnt need the money really and did the maximum bank 401k contributions every week. I cant remember how much it was but I THINK almost or at 50%. IN addition because I broke the SS earning threshold they started taking $1 for every dollar I made. Big deal. What some do not realize is you get that money back. I will be honest and have not examined exactly how, I didnt care. But I do know once fully retired SSA contacted me through the mail, reformulated my SS monthly SS income check to a higher amount than I was receiving because of working longer.

I mean, you either can retire, want to retire or cannot retire is all that needs to be thought about. Social Security is NOT a retirement account it is SUPPLEMENTAL INCOME to what you should have saved.

Forget the static of people, advisors, the media saying your leaving money on the table, baloney I say. Everyone wants to be famous and get their name in print. You're not leaving anything on the table anymore than when you gave up your job to retire. The only way to leave money on the table is if you die. Then you, your family misses out on all that income. Start collecting 5 years early (If you can) and that is 5 years of income that you could be banking or enjoying life at a time that you can still enjoy it or wait until 67 and hope you live to 80 before you start to break even in the money you got out of Social Security because you didnt start collecting at 62.
Think about that in numbers, the average check is $1,770 a month and many of us are above that amount but lets use $1770.
That is $106,200 that you collected from Social Security if you retired at age 62 vs $0.00 if you retired at age 67. Pick and choose, options are great!

You can do it or not.
Retire at 62 or 67 what is the difference? to me just one difference. Paid for health insurance through Medicare that kicks in at 65. Other than that. Start collecting at 62 (in my case 63) AND big deal, someone who waits to 67 will not break even in Social Security payments with the person that retires at 62 until they get close to 80 years old. SO bottom line you either want to or can afford to retire or not. If money was the subject, why not just keep working, bank the money and not worry about the Social Security payout.
 
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My full retirement age is 66 1/2. I'm trying to decide to take it then or wait a year or 2 longer for the additional 8% a year.
The reason I'm considering waiting is because my wife will get my larger benefit if I croak but I can't tell if her larger benefit would be capped at my 'full retirement' (66.5 years) benefit or the larger one if I wait a year or two longer. I can't seem to find the answer on line and when I called SS the agent didn't seem to understand my question. Does anybody know for sure if the spousal benefit is capped at 'full retirement' benefit or if it is based on the amount of my benefit when I die even if that's above 'full retirement' amount?.
Everything I read online says that if the surviving spouse is at or above their full retirement age when their spouse dies, the surviving spouse receives whatever benefit the deceased spouse was getting at the time of their death. I don't see anything that says the benefit is capped at the deceased spouses "full retirement age benefit". Can anyone provide a link where it says the benefit is capped?
 
Dollar wise I would expect the SS date not to matter for an average person. However, there is no such thing as an average person so you have to make the decision as to how long you intend to stay alive. Of course, you can't decide that.

It then boils down to what you can afford to do.

I myself intend to take SS the day after I turn 62. But I have planned for it and am ready for a smaller monthly amount without needing to become homeless on the streets of some American city.
 
My full retirement age was 66 1/2 and I pulled the plug at that time due to the company I worked for was making some major changes. I didn't do any work at all for over 2 years and now work for a large automotive dealership 20 hours per week and love it. I still buy stocks on the side and feel very happy working part time. Everyone's situation is different and you have to figure out what is the best option for your situation. Many people die before 70 which is sad too because some try to wait it out for that extra 8% while they kick the bucket prematurely. Plus, working part time gives you the opportunity to enjoy some good years of your life before your health goes down the drain. I am very active but something can happen and it's game over. Nothing in life is guaranteed to work out perfectly. You have one problem and get it taken care of another problem starts...that's life folks.
The same for me as far as the age goes but I was on SSDI for 4 years before due to a work injury that had me stuck on worker's comp. (NY) . I retired as soon as I hit "full retirement" , SSDI automatically switched to regular Social Security. If a person can afford it, I'd start taking it as soon as possible now. Who knows what congress will do with our money next? They weren't supposed to touch social security in the first place and with all the handouts now we'll be lucky if it still exists in a few years!
 
Always take the money as soon as you can.
I sorta agree on the "soon as you can" part. I dunno about always, people have all sorts of different income streams and savings types. there may be a tipping point. For me it was 65.

My example. I retired at 62. But held off on SS. We still lived OK on our various incomes including Amsoil, pension, some muni bonds I had from high income DINK days.

First of all I was (and still am a bit) super over worried about tapping into our various $ accounts. Pretty unfounded in reality. Our savings have grown. We have, how shall I say a few more times than a meg now. The income from a single account (from previous house sale) pays the mortgage and then some on this house.
Second of all I was for good reason hyperfocused on keeping income streams down - because our health insurance premiums before Medicare are HEAVILY weighted on income.

So in a nutshell waiting until 65 made all the sense for us.

My wife gets a state pension at 65 later this year. Plus she inherited her mom's $.

Point is again, life in the USA is vastly individualistic in this area. I like early if someone is giving something out (hahaha) but if you just blow the cash on ATV's and grass.......vs saving and investing.........
 
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Everything I read online says that if the surviving spouse is at or above their full retirement age when their spouse dies, the surviving spouse receives whatever benefit the deceased spouse was getting at the time of their death. I don't see anything that says the benefit is capped at the deceased spouses "full retirement age benefit". Can anyone provide a link where it says the benefit is capped?
Unless the surviving spouse benefit is larger. Meaning the surviving spouse does not get two benefits. It's one or the other.
 
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