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Stephanie O Joy, Esq
Stephanie O Joy, Esq, Soc. Sec. Attorney
Category: Social Security
Satisfied Customers: 13449
Experience:  19+ years legal exp. - 10+ years owning/operating her own SSD Law practice.
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From my understanding, year from the age of 62 one puts off

Customer Question

From my understanding, for every year from the age of 62 one puts off claiming social security it increases the payment by around 8% - which totally makes sense. What I don't understand is the difference between "full retirement" at age 66 and full retirement at age 70. I keep reading articles that mention these two ages but if all it means is one would get an additional 8% SS check for every year between 66 and 70 what is the difference between that and any other year brackets - for example between 63 and 67?
Submitted: 1 year ago.
Category: Social Security
Expert:  Stephanie O Joy, Esq replied 1 year ago.

Good morning, with regard to your post:

"From my understanding, for every year from the age of 62 one puts off claiming social security it increases the payment by around 8% - which totally makes sense. ------- Yes. So instead of collecting at 62, at X amount, you can increase X by 80% or so, by waiting til 70 to collect.

Before your FRA (full retirement age), should you choose to collect early, you get your benefit reduced BELOW your PIA (Primary Insurance Amount) if you collect "early", while at FRA, you get exactly your PIA (if you start collecting then) and after 66, it increases beyond your PIA.

"What I don't understand is the difference between "full retirement" at age 66 and full retirement at age 70. -------- Age seventy is beyond FRA, and you earn DRCs, delayed retirement credits that get you that additional 8% a year as 'compensation' for delaying collecting beyond your FRA. At age 70, you have clearly passed your FRA, so you have no penalties for collecting, and you also have gained those DRCs. You are at least FRA at both ages. And your benefit amount at either age will depend on if and when you filed and started collecting.

"I keep reading articles that mention these two ages but if all it means is one would get an additional 8% SS check for every year between 66 and 70 what is the difference between that and any other year brackets - for example between 63 and 67? -------- I don't think I am understanding your concern. There is no meaningful difference, except before FRA, you prevent yourself from 1) collecting your full retirement amount (PIA) forever and 2) subjecting yourself to an earnings limit. I suspect that they talk about the 66+ ages because so many people collect retirement at their exact FRA (say, 66), not realizing that they could create a raise for themeselves if they delayed collecting til 67, 68 69, or 70.

But, everything stems from your PIA. If you collect at 63, since it is before your FRA, you get reduced benefits - forever. (Despite some misinformation out there, if you collect at 63, you don't get an increase EVER, due to age... I.e. you don't pop up to your full benefit (PIA) when you turn your FRA.

Your benefit does NOT increase by 8% once you start to collect. So let's say your PIA is $1000/mo. But you decide not to wait until retirement age, but to collect early at 63. If your FRA is 66, you took 3 years early, for an approximate 24% reduction, making your SS benefit only $740/mo for the rest of your life. However, if you took at 66 instead, you'd get the $1000 for the rest of your life. If you delayed beyond your FRA and started collecting at age 67, you'd get an 8% boost in your benefit amount beyond your PIA: so instead of the $1000 PIA amount, you'd get $1080/month for the rest of your life. And if delayed collecting til age 70, you'd get $1320 for the rest of your life. When you start to collect is critical to your future monthly income, if you rely on your SS to get by.

PIA (the full retirement age amount) is also the figure they use to determine what your family members, if any, may get, as they generally do not get penalized by your early taking, nor do they benefit from your late taking (DRCs).

But, yes, taking at 63 vs. taking at 67 would mean about a 32% difference. Plus, while UNDER FRA, you'd not be able to work unlimited without owing money back to the SSA due to the earnings limit.

Expert:  Stephanie O Joy, Esq replied 1 year ago.

I hope this helps! My goal is toprovide you with excellent and accurateservice – if you feel you have gotten anything less, please reply back, Iam happy to address follow-up questions.

Kindly rate me "excellent"when you are done. I look forward to assisting you in the future, shouldyou have legal questions. Be sure tostart future posts with "To ***** Esq., ONLY" ifyou want me to specifically answer it.

Sincerely, ***** ***** Joy, Esq.

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