May 15 2008
Retirement Age Raised Over Past Years
At what age a person can retire is going to be up to each individual and his or her financial position, but for the majority it will be determined by the retirement age currently established by the Social Security Administration. Each person s situation will be different concerning finances, family obligations and income available on which to live once they stop working.
To be eligible for retirement income from Social Security, a person must have earned at least 40 credits. For every $1,000 earned through work or self-employment a person earns one credit during that year, so a person who earns at least $4,000 in the year will receive four credits, the maximum number of credits a person can earn in one year. Those approaching retirement age may want to contact the Social Security Administration for a review of their account to verify eligibility.
A person must work at least 10 years in order to receive Social Security benefits, and they amount they receive is based on their average lifetime earnings and is based on a formula established by the government and can change at any time. The initial retirement age at which a person can receive their full retirement benefits was 65, but recent changes has raised the full retirement age to 67, for those born in 1960 or later. Those born in 1943 1954 will reach full retirement age at 66 and those born in 1937 or earlier can retire at 65.
Retirement Age Determines Retirement Income
There are options for people to receive Social Security Benefits prior to reaching the full retirement age, however by tapping the money early, there is also a reduced monthly benefit. For example, a person can retire at age 62, as much as four years prior to their full retirement age and their benefits will be reduced by 25 percent. Retiring at age 63 will reduce their benefits by 20 percent.
There are also benefits to those who choose to work beyond their full retirement age, and those working but receiving benefits can see their benefits increase for each month they work past their retirement age. For example a person who is eligible for full retirement age benefits at age 66 and continues to work until age 70, can receive an eight percent annual increase in their retirement benefits, provided they did not receive benefits during the last four years.
Those planning to retire, regardless of their age, should sign up for benefits at least three months before their expected retirement date. Those planning to work past age 65 shuold sign up for Medicare three months before their 65th birthday or risk incurring higher insurance premiums.