FAQs about Social Security Retirement Benefits
For years, people have questioned the long-term viability of the Social Security system. In June, the Social Security Board of Trustees released its annual report on the long-term financial status of the Social Security Trust Funds. It projects that the combined asset reserves of the Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds will become depleted in 2034. Additionally, the Disability Insurance Trust Fund will become depleted in 2023. More generally, people approaching retirement age often have other questions about benefits they may be eligible to receive from the Social Security Administration (SSA). Here are the answers to several common inquiries. How Soon Can I Start Collecting Retirement Benefits? If you want to receive full retirement benefits from the SSA, you must wait until you reach the so-called full retirement age (FRA). But you may apply for benefits as early as age 62. Starting early will reduce your monthly benefits by as much as 30%, but, of course, you'll receive benefits for more years. Your tax adviser can help figure out the exact monthly benefit reduction and help you determine if you likely will be better off waiting until your FRA to start taking benefits. What Is My FRA? Your FRA depends on the year in which you were born.Year of Birth | Full Retirement Age |
1937 or earlier | 65 |
1938 | 65 and 2 months |
1939 | 65 and 4 months |
1940 | 65 and 6 months |
1941 | 65 and 8 months |
1942 | 65 and 10 months |
1943–1954 | 66 |
1955 | 66 and 2 months |
1956 | 66 and 4 months |
1957 | 66 and 6 months |
1958 | 66 and 8 months |
1959 | 66 and 10 months |
1960 and later | 67 |
- Your original birth certificate or other proof of birth,
- A marriage certificate or divorce decree when applying for spousal benefits,
- Proof of U.S. citizenship or lawful alien status if you were not born in the United States,
- A copy of your U.S. military service paper(s) if you performed military service before 1968, and
- A copy of your W-2 Form(s) and/or self-employment tax return for the prior year.
- If you're under FRA for the entire year, you forfeit $1 in benefits for every $2 earned above the annual limit. For 2016, the limit is $15,720.
- In the year in which you reach FRA, you forfeit $1 in benefits for every $3 earned above a separate limit, but only for earnings before the month you reach FRA. The limit in 2016 is $41,880.
- At age 60 or older,
- At age 50 or older if disabled, or
- At any age if she or he takes care of a child of the deceased who is younger than age 16 or disabled.
- Younger than age 18 (or up to age 19 if they are attending elementary or secondary school full-time), or
- Any age and were disabled before age 22 and remain disabled.
Highlights of New Trustees Report In its annual report to Congress, the Social Security Board of Trustees announced that the asset reserves of the combined Old-Age and Survivors Insurance and Disability Insurance (OASDI) Trust Funds increased by $23 billion in 2015. The combined trust fund reserves are still growing and will continue to do so through 2019. Here are some other highlights from the report: · Total income, including interest, to the combined OASDI Trust Funds amounted to $920 billion in 2015. · Total expenditures from the combined OASDI Trust Funds amounted to $897 billion in 2015. · The SSA paid benefits of $886 billion in calendar year 2015. There were about 60 million beneficiaries at the end of the calendar year. · During 2015, an estimated 169 million people had earnings covered by Social Security and paid payroll taxes. · The combined Trust Fund asset reserves earned interest at an effective annual rate of 3.4% in 2015. Even though the income exceeded expenses from the OASDI Trust Funds and asset reserves increased in 2015, the reserves are projected to be gradually depleted over the next 18 years. Unless Congress takes action to reverse the situation, the OASDI Trust Funds are expected to be insolvent by 2034. This underscores the importance of saving for retirement while you're working. Social Security benefits should be viewed only as a supplement to your other assets. |