Social Security is a critical source of income for millions of Americans, but understanding when you can begin receiving benefits can be confusing. Most people think of Social Security as something you start collecting when you retire, but in reality, there are several ages and circumstances that affect when you can begin receiving these benefits. In this topic, we will explore the youngest age you can start collecting Social Security and how it impacts your benefits.
What is Social Security?
Social Security is a U.S. government program designed to provide financial support to individuals in the form of retirement benefits, disability benefits, and survivor benefits. Workers pay into the Social Security system through payroll taxes over the course of their careers, and when they retire or experience a qualifying life event, they can begin collecting these benefits.
For most people, Social Security becomes a vital source of income during retirement, but the age at which you can begin collecting benefits varies based on several factors.
The Youngest Age to Collect Social Security: 62
The earliest age at which you can begin collecting Social Security retirement benefits is 62. However, starting your benefits at this age comes with consequences. While you are legally eligible to begin receiving payments at 62, taking benefits before your Full Retirement Age (FRA) results in a permanent reduction in the monthly payment amount.
Early Benefits at Age 62
When you begin collecting Social Security at age 62, your benefits will be reduced by a certain percentage, depending on how many months before your Full Retirement Age (FRA) you start collecting. For example, if your FRA is 67 and you begin collecting at 62, your monthly benefits will be reduced by approximately 30%. This reduction is permanent, meaning that even after you reach your FRA, your monthly payment will remain lower than it would have been if you had waited until FRA to start collecting.
While the reduction can be substantial, many people choose to begin benefits at 62 because it provides them with immediate financial support, especially if they need the money for living expenses. However, the trade-off is receiving less money over the course of their retirement.
Full Retirement Age (FRA) and Its Impact on Benefits
The Full Retirement Age (FRA) is the age at which you can begin receiving your full Social Security retirement benefit, without any reduction. The FRA depends on the year you were born:
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Born in 1937 or earlier: FRA is 65.
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Born between 1938 and 1959: FRA gradually increases by two months for each year, reaching 66.
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Born in 1960 or later: FRA is 67.
Waiting until your FRA to begin collecting Social Security ensures that you will receive the full monthly benefit amount that you are entitled to, without any reduction.
For example, if your FRA is 67 and you wait until you reach 67 to start collecting, you will receive the full monthly benefit amount. If you start at 62, you will experience a permanent reduction, but if you wait until after your FRA, you can receive delayed retirement credits.
Delaying Social Security Benefits Beyond FRA: The Delayed Retirement Credits
If you choose to delay collecting Social Security benefits beyond your Full Retirement Age, you will earn delayed retirement credits. These credits increase your monthly benefit amount by a certain percentage for each year you delay receiving benefits.
For individuals born in 1943 or later, your benefits will increase by 8% for each year you delay collecting Social Security after your FRA. This means that if you wait until age 70 to begin collecting, you will receive 32% more than if you had started at your FRA.
Delaying your benefits can be a good strategy if you are in good health, have a longer life expectancy, and can afford to wait. The increased monthly benefit can provide you with greater financial security later in life.
Can You Collect Social Security Benefits Before Age 62?
While age 62 is the youngest age to start collecting Social Security retirement benefits, there are other circumstances under which individuals can collect Social Security benefits before this age. These are typically based on life events such as disability or the death of a spouse.
Disability Benefits
If you are unable to work due to a disability, you may qualify for Social Security Disability Insurance (SSDI). This program allows individuals to receive benefits before age 62, provided they meet the program’s eligibility requirements. SSDI benefits are available to those who have worked and paid into the Social Security system, and who have a medical condition that prevents them from working.
The amount of SSDI benefits is based on your past earnings, and once you begin receiving these benefits, you will also eventually qualify for regular Social Security retirement benefits when you reach your FRA.
Survivor Benefits
In the event of the death of a spouse, a surviving spouse may be able to collect survivor benefits from the Social Security system before reaching age 62. In general, a widow or widower can begin collecting survivor benefits as early as age 60 (or age 50 if disabled), but starting benefits before FRA may result in a reduced monthly payment.
For example, if you are a surviving spouse and start collecting survivor benefits at age 60, your benefits will be reduced compared to waiting until your FRA. However, if you are caring for a dependent child, you may also qualify for survivor benefits earlier.
Factors to Consider Before Collecting Social Security Early
Deciding when to start collecting Social Security benefits is a personal decision that depends on many factors. While the youngest age you can begin collecting is 62, there are several important factors to consider before making that decision:
1. Health and Life Expectancy
If you are in good health and expect to live a long life, delaying your benefits until your FRA or beyond may be a better option. However, if you are in poor health or have a shorter life expectancy, starting early may make sense to ensure you receive benefits while you are still able to enjoy them.
2. Financial Needs
If you need financial support and cannot afford to wait until your FRA, starting Social Security at age 62 may be necessary. However, keep in mind the reduction in your monthly benefits. It’s important to weigh your immediate financial needs against the long-term benefits of waiting.
3. Work Situation
If you plan to continue working after you start collecting Social Security, starting at 62 may reduce your benefits if you earn too much. There are income limits for those who begin collecting benefits before their FRA. For every $2 you earn above the annual limit, $1 in benefits will be withheld. Once you reach your FRA, these income limits no longer apply.
Making the Right Decision for Your Financial Future
The decision about when to begin collecting Social Security benefits is an important one, and it depends on a variety of personal factors, including your health, financial situation, and goals for retirement. While 62 is the youngest age at which you can begin collecting benefits, it’s important to weigh the trade-offs carefully. Collecting benefits early results in a permanent reduction in your monthly payment, while waiting until your Full Retirement Age or beyond can result in higher benefits.
By understanding the different options and considering your unique circumstances, you can make an informed decision that best supports your financial future.