Latest news with #FullRetirementAge
Time of India
11-05-2025
- Business
- Time of India
Social Security rules around new retirement age announced as fresh rules begin in May
As of May 2025, the Social Security Administration 's gradual adjustment of the Full Retirement Age (FRA) continues to shape the retirement decisions of millions of Americans. This phased change, originally established by the 1983 amendments to the Social Security Act, is designed to reflect increased life expectancy and ensure the long-term sustainability of the Social Security program. #Operation Sindoor India responds to Pak's ceasefire violation; All that happened India-Pakistan ceasefire reactions: Who said what Punjab's hopes for normalcy dimmed by fresh violations In 2025, individuals born in 1959 are reaching a key milestone. Their Full Retirement Age is now set at 66 years and 10 months, meaning depending on their birth month, they will reach FRA between March 2025 and January 2026. This adjustment is part of a broader schedule that incrementally raises the FRA for each birth year cohort. For example, those born in 1955 have an FRA of 66 years and 2 months, while individuals born in 1956 must wait until 66 years and 4 months. The FRA increases by two months each subsequent year: 66 years and 6 months for 1957 births, 66 years and 8 months for 1958, and 66 years and 10 months for those born in 1959. For anyone born in 1960 or later, the Full Retirement Age is set at 67. Continue to video Next Skip Ads by Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like IITD Tech Leadership Program IITD TAILP Apply Now Undo by Taboola by Taboola ALSO READ: Trump stops funding for life-saving infant heart device research, cancels $6.7 million grant While individuals can begin collecting Social Security retirement benefits as early as age 62, doing so comes with a significant trade-off: reduced monthly payments. For someone whose FRA is 66 years and 10 months, starting benefits at age 62 would lead to a permanent reduction of approximately 29.17%. On the other hand, delaying retirement beyond the FRA can boost benefits considerably. Live Events For each year retirement is postponed (up to age 70), monthly benefits increase by about 8%. This means a person who waits until 70 could receive significantly more each month than someone who starts collecting earlier. ALSO READ: Elon Musk sued: Did SpaceX fire an employee over frequent bathroom usage due to Crohn's disease? These changes were driven by demographic realities. When the Social Security system began in 1935, the average life expectancy in the U.S. was around 61 years. Today, that number has climbed to nearly 79 years. The 1983 reforms responded to these shifts by slowly raising the FRA from 65 to 67 over several decades. As a result, retirees today must carefully weigh when to claim their benefits, balancing immediate needs against long-term financial security.
Epoch Times
29-04-2025
- Business
- Epoch Times
Cracking the Code: Understanding Social Security and Maximizing Your Benefits
Social Security is a phrase often used in retirement planning and has been discussed in the media recently. For many, though, it remains a mystery. It provides income, but how does it really work? Further, it's easy to become overwhelmed by countless claims, strategies, and confusing terminology. This post, however, will help you navigate Social Security's complexities, maximize your benefits, and secure a more comfortable retirement. What Exactly Is Social Security? Imagine a safety net made up of generations of hardworking Americans. That's what Social Security is all about. The program was While working, you and your employer contribute 6.2 percent of your wage through the Federal Insurance Contributions Act (FICA). In turn, the Social Security Trust Fund benefits current beneficiaries. In a sense, today's workers are supporting yesterday's retirees. Decoding the Benefit Calculation Social Security checks don't appear out of nowhere. The amount is calculated based on your lifetime earnings. As a simplified breakdown, here is what you need to know. Your earnings history determines Social Security retirement benefits. To calculate your benefit, the Social Security Administration (SSA) uses the following formula: Your highest 35 years of earnings (adjusted for inflation) Your age at the time you begin claiming Your full retirement age For your information, based on the 2024 edition of the Full Retirement Age (FRA) A person's FRA is the age at which they can receive 100 percent of their Social Security benefit. Depending on your birth year, it may be: The FRA for those born between 1943 and 1954 is 66. Those born between 1955 and 1959 will see an increase in FRA. If you were born in 1960 or later, your FRA is 67. You can start claiming at age 62 but must accept a 30 percent reduction. Alternatively, you can delay benefits past your FRA and increase your monthly payment up to 70 years of age. The Million-Dollar Question: When Should You Claim? Here is where 'strategy' comes in. There is no one-size-fits-all solution. In each case, it varies: Claiming early (Age 62–FRA). Pros: You get to access your income sooner. This is a great option if you need the money or want to retire early. Cons: It is possible to have your benefits permanently reduced by up to 30 percent. In addition, your spouse will receive lower survivor benefits as a result. Claiming at FRA. Pros: The benefit you receive is full and unreduced. This is a good middle ground for many people. Cons: If you delay, you lose out on the extra boost. Delaying Until 70. Pros: Your benefit increases by 8 percent every year you delay past FRA up to age 70. Over your lifetime, this can amount to a substantial sum. Cons: It takes longer for your income to arrive. As such, you might not 'break-even' if you don't live a long life. Making Sense of the Break-Even Point In Social Security discussions, the term 'break-even' is often used. It means the benefits you receive from delaying exceed those you would have received from claiming earlier. If you expect to live well into your 80s or beyond, delaying benefits can be beneficial financially. Strategies to Maximize Your Benefits Time isn't everything; it's all about playing the long game. Work at Least 35 Years With fewer than 35 years of income under your belt, zero-income years are included in your benefit calculation, reducing it. Replacing low-earning years from your early career with part-time work later in life may even be possible. Boost Your Earnings You'll receive more benefits if you earn more (especially during years of higher wages). An individual's lifetime earnings are affected by income from raises, promotions, side gigs, and self-employment. Strategic Delaying In addition to delaying your benefits beyond your FRA, you may also be able to increase your monthly check considerably. This is particularly useful for those with longer life expectancies and families that have a long lifespan. Spousal Coordination To boost household income, married couples can use several strategies: Spousal benefit . At FRA, a spouse can receive up to 50 percent of the other's benefits, even if they didn't work much. Claim and suspend . While one spouse receives a spousal benefit, the other claims their own benefit at FRA. Survivor benefits . After turning 60, widows and widowers can switch from survivor benefits to their own higher benefits. Increase Your Tax Awareness Up to 85 percent of your Social Security benefits may be taxable, depending on your other sources of income (pension, withdrawals from retirement accounts, etc.). You can minimize your tax burden if your income does not exceed certain thresholds. As of 2025, the basic thresholds are as follows: Single filers . An income over $25,000 may be subject to partial taxation. Joint filers . If your income exceeds $32,000, your benefits will be taxed. Conduct an Earnings Test If you claim benefits before FRA and continue to work, the Social Security Administration may temporarily withhold part of your benefit. As an example, if you are under the FRA in 2025, you lose $1 for every $2 you earn over $22,320. Although the money isn't lost, it can affect short-term cash flow because it will be added back to your benefits later. Use Online Tools The SSA's website ( has calculators and access to your Social Security Statement. By regularly checking your statement, you can ensure that your earnings record and benefits are also accurate. Be Aware of Special Situations Divorced individuals. It may be possible to claim benefits based on your ex-spouse's record if you were married for more than ten years. Survivors. Benefits may be available to survivors' spouses and minor children. Public employees. The Windfall Elimination Provision (WEP) or Government Pension Offset (GPO) can reduce the benefits of some government workers. Debunking Common Social Security Myths Let's debunk some of the most common myths to help you better understand this vital part of your financial future. 'The Social Security System Is in Financial Trouble' This is a big one, and it causes unnecessary worry. It is not likely that Social Security will disappear overnight. It is a pay-as-you-go system: you and your employer contribute to FICA taxes, but that money primarily pays current benefits. Social Security indeed faces some financial challenges. Historically, the system has collected more than it has paid out, accumulating a nice surplus. The tide is turning, however. With more people retiring and living longer, more benefits are being paid out than taxes are being collected. Related Stories 4/26/2025 4/25/2025 The key takeaway is this: without changes, the surplus will disappear Another way to think of it is like your car running low on gas. While it won't stop working immediately, you'll have to refuel soon. This is where Congress comes in. As they did in 1983, they will need to make adjustments. Among those adjustments could be raising the retirement age, raising taxes, or taxing benefits differently. 'Social Security Benefits Must Be Claimed by Age 62' Many people make potentially costly decisions because of this myth. Yes, 62 is the earliest you can claim benefits. However, it is not required. You will receive your full, unreduced pension when you reach your 'full retirement age' (FRA). Your FRA depends on your birth year; if you were born after 1960, your FRA is 67. At 62, you can claim early and get a permanent reduction in your monthly payments. For example, claiming benefits at 62 could mean a 30 percent reduction in monthly income if your FRA is 67. Even if you plan to live a long retirement life, that's a significant sum. On the flip side, if you can hold off until age 70, you'll get a 'bonus' of about 8 percent more per year for each year you delay claiming your FRA. In other words, if your FRA is 67 and you wait until 70, your monthly income will increase by 24 percent. If you wait from 62 to 70, your income will increase by 77 percent. 'Retirement Income Will Be Derived Mainly From Social Security' Although Social Security is an important part of your retirement plan, it usually isn't enough to live comfortably. The purpose of this is to supplement your income, not to be your sole source. Think of it as one piece of a puzzle. To maintain your desired lifestyle, you'll probably need other sources of income, such as savings, investments, or pensions. With the help of a financial advisor, you can prepare a comprehensive income plan that includes Social Security and other sources of income. 'Guaranteed Colas Are Available Every Year' Your benefits are adjusted for inflation through the cost-of-living adjustment (COLA). The Consumer Price Index for Urban Wage Earners and Clerical Workers However, there is no guarantee that there will be a COLA every year. If there is no significant inflation, there will be no adjustment. The same thing happened in 2010, 2011, and 2016. Fortunately, the COLA process is automatic. As such, Congress does not need to vote every year. 'There Is No Way You Can Get All the Money Back You Put Into the Program' This will differ depending on your circumstances, especially how long you live. As a safety net, Social Security provides a guaranteed lifetime income. Inflation-protected Social Security income provides inflation-free income for life, unlike FICA. Whether you live to 100 or beyond, you'll keep receiving payments. In addition, if you pass away before your spouse, they may be eligible for survivor benefits. 'A Person Can Outlive Their Social Security Benefits' This is simply not true. You will receive payments every month until you die. It is a federally backed, inflation-indexed, guaranteed income stream. 'For Other Programs, the Government Raids Social Security' Unlike the government's general fund, the Social Security trust fund is separate from it. Nevertheless, the government borrows from Social Security. As with other government bonds, tax revenue is invested in Treasury securities. There is no limit to how the government can use the money, but it must repay it with interest. Despite the appearance that the government is stealing from Social Security, they always repay the money, and the interest increases Social Security's assets. 'After Reaching Full Retirement Age, You Can Claim Early and Get a Bump Up' This is a common misconception. As soon as you start receiving benefits, the amount is fixed. Your FRA benefit does not increase automatically. You can, however, suspend your benefits after reaching your FRA and restart them later. As a result, your benefits will increase by 8 percent every year you delay. It's also possible to cancel your benefits within the first 12 months, repay the benefits you've received, and then claim again later. However, you can only do this once. 'Social Security Benefits Are Tax-Free' Before 1984, this was true. Benefits may now be taxed up to 85 percent, depending on your income. Depending on your overall income, you will be taxed on your benefits. The Long-Term View In retirement, Social Security is a crucial piece of the puzzle. Having a thorough understanding of it is essential for making informed decisions. Prepare for the future by running the numbers, consulting a financial advisor, and planning for the long-term. The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.
Yahoo
31-01-2025
- Business
- Yahoo
I'm 63 and tried claiming Social Security early, but it was declined because I'm still working. Is that allowed?
I am 63 and decided I want to go ahead and start drawing my Social Security retirement benefits. I am still working full time. I was told that I cannot receive any Social Security benefits as long as I am working full time and make more than the annual $23,400 guideline amount. I was also told that, as long as I work, I have to wait until I am 67 to start drawing my Social Security. Is this true? 'My retirement is going to be a disaster': I'm 59 and have $45,000 in my 401(k). I earn $72,000. Am I doomed? How Apple pulled off a major feat that offset its big China miss on iPhones 'I thought about filing for conservatorship': I bought a home with my elderly parents. They reneged on their promise to sell their house and repay me. What now? Stocks don't need another Fed rate cut as much as they need this right now Tariff shock ahead? This is the trade to make before the weekend headlines hit. I know a lot of people that draw benefits, are still working, and have to call in and ask the payments be stopped because they have reached their minimum amount. I understand that my benefits will be reduced given that I am not at full retirement age, but never did I think I could not draw my Social Security when I chose to because I am still working a full-time job. Please explain in detail, because I do not understand this. I have talked to my local Social Security office, as well as calling in on the helpline. My actual benefits letter states that I am approved to draw Social Security, but at the bottom it adds, 'Payments suspended because you are still working.' When did this happen?? Suspended Related: I worked for a well-known company 40 years ago, which has been taken over several times. How do I find my pension? Claiming early while still working full time isn't always the best strategy, and your situation is a perfect example. Yes, it is true you can claim early. The earliest individuals can claim their Social Security retirement benefits is age 62, which will permanently reduce your benefits since you haven't reached your Full Retirement Age, or FRA. It is also true that there is an income limit on benefits claimed early while still working, and if your earnings surpass that limit, you won't see any of the benefits. This puts you in a not-so-ideal situation, because you've basically put yourself in a box. You can't actually see the money you're supposed to get from Social Security, but on the record you're claiming benefits early, so the amount you'd get if you weren't working is permanently reduced. Had you waited to claim benefits until you were FRA, or at least receiving less money through part-time work or some other income scenario, you'd see more money coming in from Social Security. That is because you'd either be at or nearer to FRA, or you wouldn't be passing the income limits set forth for people who claim and still work. The Social Security Administration deducts — not reduces, which happens when claiming early — your benefits based on your earnings. The annual limit for people under Full Retirement Age in 2025 is $23,400. For those who will reach Full Retirement Age this year, the limit is $62,160 for the months prior to FRA. For those who will not be at FRA for the entire year, the agency deducts $1 for every $2 over the limit, whereas if you turn full retirement age in 2025, the deduction is $1 for every $3. Here is an example: You're claiming early and your monthly benefit should be $1,000, or $12,000 for the year. You earn $50,000, which is $26,600 over the annual limit. Because the benefit is reduced $1 for every $2 over the limit, you've completely surpassed the limit, so your entire benefit would be deducted. Alternatively, if you earned say $25,000 for the year, that's $1,600 over the limit, so your benefit would be deducted by $800. 'When we figure out how much to deduct from your benefits, we count only the wages you make from your job or your net profit if you're self-employed,' the agency said. 'We include bonuses, commissions, and vacation pay. We don't count pensions, annuities, investment income, interest, veterans benefits, or other government or military retirement benefits.' Of course, you do eventually get that money back. When you reach FRA, the agency will recalculate the benefit 'to give you credit for the months we reduced or withheld benefits due to your excess earnings.' You may be able to fix this. Social Security beneficiaries may be able to withdraw their claim if they've changed their minds, the Social Security Administration said. 'To withdraw your claim, you must meet all of the requirements, including making the request in writing and repaying the benefits that you received,' it said. Beneficiaries can cancel or withdraw their applications up to 12 months after benefit approval. Here's more on that from SSA. If you went that route, you still would not receive benefits, but you would get more money when you finally do claim. Call the Social Security Administration again, or make an appointment at the nearest office, to discuss your options. 'I have a new lease on life': I sold my business for $130,000. It's the first time I'm not living paycheck to paycheck. What should I do with this money? Oracle gets $7.75 billion vote of confidence from bond investors despite DeepSeek worries Microsoft investors are ignoring this number that suggests better growth ahead 'My mother-in-law has done some shady stuff': She wants to sell air rights to her home and cheated her grandchildren out of their inheritance The easy money will be driven by Trump and the dollar, not AI, say Big Short investors
