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The amount you contribute and how long you work determines how much you get
Know your full retirement age
Full retirement age is the age at which you are entitled to receive full Social Security retirement benefits. Full retirement age is based on the year you were born.
Your “primary insurance amount”
Your primary insurance amount – or PIA – is the benefit you would receive if you begin receiving retirement benefits at your full retirement age. If you file for benefits before your full retirement age, your benefits will be reduced.2 When you file for benefits after full retirement age your benefits will be increased.
Filing for benefits
The Social Security Administration website at http://www.ssa.gov provides a wealth of information on Social Security retirement benefits. It’s also where you can create your own “My Social Security” page to securely view your earnings history and the estimated benefits you may receive at different filing ages.
The age at which you begin receiving benefits is one of the most important factors affecting the amount of your monthly benefit.
This chart shows the effects that claiming age has on a hypothetical monthly Social Security benefit of $1,000; it assumes a full retirement age (FRA) of 66. The chart shows that when benefits are claimed:
- At full retirement age – the full monthly benefit of $1,000 is paid.
- Before full retirement age – the monthly benefit gradually reduces. If benefits are claimed at age 62, only $750 would be paid each month – a 25% decrease.
- After full retirement age – the monthly benefit increases for every year claiming is delayed, up until age 70. In this case, the monthly benefit at age 70 has increased to $1,320 – a 32% increase. This increase is due to delayed retirement credits.
Delayed retirement credits can provide a powerful multiplier of benefits over your lifetime. For each year after full retirement age that you delay taking benefits, delayed retirement credits increase your monthly benefit amount. The percentage of increase depends on the year you were born. If you were born in 1943 or later, your benefit increases by 8% each year until you reach age 70. After that, no additional delayed retirement credits are earned.3 If you were born after 1954, the potential delayed retirement credits gradually reduce as your full retirement age increases. If your full retirement age is 67, delayed retirement credits can add up to a maximum increase of 24%.