Social Security Benefits Simplified

There comes a time in everyone life when they have to weigh their options and decide if they should retire or continue working. For some this is not an easy decision. You have to take into consideration how much money you need to live on and how much of that you are eligible to get through Social Security. It may help to know some of the basic facts about Social Security benefits before you take the first step to starting a Social Security claim.

First of all the earliest that anyone can claim Social Security is 62, unless you are some type of Social Security Disability. At age 62 you will be receiving less money a month than if you waited until full retirement age, which at this point is for anyone born after 1960 is age 67.

Let us say that at age 62 you have a comfortable savings and want to retire, what does this mean in terms of reduction in benefits? If you were born after 1960 your benefits will be reduced 30% from what you would have gotten had you waited until full retirement age to retire. If your retirement benefits would have been $1000 a month now you will receive $700 a month and your spouse will be reduced by 35%. This means your spouse will be receiving $325 a month instead of $500. But remember that your spouse must be of retirement age also to claim their benefits.

If you choose to take the early retirement option you can earn up to $14,160 a year before it will start reducing your Social Security benefits. When you earn more than $14,160 a year your benefits will be reduced $1 for every $2 you earn. In other words your yearly Social Security benefit at age 62 is $8,400 a year, if you make $17,160 at a part time job ($3,000 over your limit) your benefits will be reduced by $1,500 for the year or down to $6,900 a year $575 a month. The up side to working after taking early retirement is that your Social Security benefits will be recalculated after you reach full retirement age.

Once you have reached the full retirement age there is no limit to the amount of income you can earn. You will however have a reduction in benefits of $1 for every $3 you earn for the months you work before you reach full retirement age.  

The Social Security Website has an estimator to help you determine your Social Security retirement benefits if you are having trouble figuring them out on your own. Once you have made the decision to start receiving benefits you can apply for them online at