What is the Social Security retirement age?

Man sitting on his couch, working on his laptop and phoneImage: Man sitting on his couch, working on his laptop and phone

In a Nutshell

The Social Security retirement age — when you can begin drawing Social Security benefits — technically starts at 62. But you’ll only get full Social Security benefits if you wait until you reach your normal retirement age, which is 67 for people born after 1959.
Editorial Note: Intuit Credit Karma receives compensation from third-party advertisers, but that doesn’t affect our editors’ opinions. Our third-party advertisers don’t review, approve or endorse our editorial content. Information about financial products not offered on Credit Karma is collected independently. Our content is accurate to the best of our knowledge when posted.

If you’re decades away from retirement, you may not spend much time thinking about when you’ll start drawing Social Security benefits.

But Social Security can be a valuable way to supplement your income in retirement. So it’s important to plan for how Social Security will fit into your overall retirement savings strategy. To do that, you’ll need to understand how Social Security benefits work, what age you can begin drawing on them and how your Social Security retirement age affects how much you receive.

What is the Social Security retirement age?

The age when you start receiving your Social Security benefits is called the Social Security retirement age. The earliest age you can start drawing benefits is 62.

But if you start taking benefits at 62, won’t get your full benefit amount. That’s because you won’t receive the full benefit amount that you qualify for until you reach your full (or normal) retirement age. If you retire before reaching your full retirement age and begin drawing Social Security benefits, your monthly benefit amount will be reduced.

For people born after 1959, full retirement age is 67. That age has changed over time. For example, for people born in 1937 or earlier, it’s 65. Congress increased the full retirement age in 1983, citing better health and longer average life expectancies. And it’s not out of the question that the age could increase again in the future. So if you were born in the late 1980s or 90s, full retirement age might increase again by the time you’re ready to retire.

“Looking at all the projections and knowing that the Millennial generation is bigger than the Baby Boomer generation, there’s likely going to need to be changes,” says Amy Irvine, a certified financial planner and founder of Rooted Planning Group.

While you’ll receive less than your full benefit amount if you start taking Social Security before your full retirement age, waiting to draw benefits after you reach full retirement age could mean you get more. But be aware that your benefits won’t continue to increase after you turn 70.

Check out the Credit Karma Guide to Saving for Retirement

How are Social Security retirement benefits calculated?

As of June 2019, the average monthly benefit for retired workers was $1,471. But the amount you qualify for depends on how much you earned while you were working.

The Social Security Administration uses a complex process to determine your benefit amount. It starts by looking at up to 35 years during which you earned the most money while working (for years after 1950). Then it indexes those amounts to reflect the change in general wage levels during your time in the workforce.

Next, it adds up those indexed earnings and divides that sum by the total number of months in those years. After rounding the average down, the end result is your average indexed monthly earnings amount. The SSA then calculates your primary insurance amount — the benefit you’ll receive if you wait until your full retirement age to begin taking Social Security payments.

While it’s possible to walk through this calculation using the information on the SSA’s website, you can find your estimated benefit amount by registering for an account on the Social Security Administration’s site.

With this account, you can view your estimated benefit, check your earnings record and even request a replacement Social Security card.

What if I take Social Security early?

The benefit amount you’ll find in your Social Security account is the estimated benefit amount you’ll receive if you start taking benefits at your full retirement age. But if you take benefits sooner, you’ll receive a fraction of that amount.

For each month before your full retirement age that you start receiving benefits, your monthly check will be reduced by 5/9 of 1% for the first 36 months and 5/12 of 1% per month beyond that.

So if your full retirement age is 67 and you start taking benefits at age 62, your monthly benefit will be reduced by about 30%.

Remember, though, that you can receive more than the full benefit amount if you delay receiving your benefits past your full retirement age. The late retirement credit per year is 8% for people born in 1943 or later, so if you wait until right at age 70, you’ll receive 124% of your full benefit. You won’t get any extra credit once you reach age 70, though.

To calculate the percentage of your benefit you’ll get based on retiring early or late, use the SSA’s calculator.

How can I incorporate Social Security benefits into my retirement planning?

Social Security benefits can provide a nice supplement to your retirement savings, but they probably won’t be enough to live on comfortably.

“[Social Security] was never meant to be the only source of income,” says Irvine. “We used to talk about the three-legged stool of retirement income: pension, Social Security and personal savings. Now it’s down to personal savings and Social Security.”

If you don’t have the benefit of a pensionn, it’s essential to work on building your own nest egg to ensure financial security when you leave the workforce.

The sooner you start saving, the more time your investments will have to grow. If your employer offers a 401(k) or similar plan, consider contributing, even if it’s just a small amount to get started. A 401(k) plan can be especially valuable if your employer offers to match a percentage of your contributions.

Also, consider using an individual retirement account — an IRA — which you can set up separately from your employer. You can set up a traditional or Roth IRA account with a bank or brokerage firm and potentially get some tax benefits in return. Roth IRAs have income limits, so check to ensure you qualify before opening one.

What’s next?

If you don’t already have a retirement account, start looking at options. If your employer offers matching contributions in its 401(k) plan, get started there to take advantage of the assistance. If you max out the employer match, consider continuing to invest in the 401(k) account or opening a self-directed IRA.

Whatever path you choose, take some time to consider how much money you can reasonably set aside for retirement while also considering your lifestyle and other financial goals. Even if you can only contribute a little toward retirement today, you can plan to increase that amount over time as your income grows.

Bottom line

Saving for retirement is important. The amount you save now will directly affect your financial wellbeing later in life. And while Social Security should never be your main source of income in retirement, it can be a helpful supplement to your own retirement savings.

Knowing your full retirement age — and how the age you start taking benefits will affect the amount you receive — can help you maximize the value of your Social Security benefits.

About the author: Ben Luthi is a personal finance freelance writer and credit cards expert. He holds a bachelor’s degree in business management and finance from Brigham Young University. In addition to Credit Karma, you can find his wo… Read more.