What is my Normal Retirement Age?
Your Normal Retirement Age is dependent on the year in which you were born. If you were born between 1943 and 1954, then Normal Retirement Age is 66. If you were born between 1955 and 1959, your Normal Retirement Age is 66 and a few months (2 months for every year past 1954). For those born in 1960 or later, the Normal Retirement Age is 67.
What is my Primary Insurance Amount (PIA)?
Your Primary Insurance Amount or PIA is the monthly benefit you receive from Social Security at your Normal Retirement Age.
When can I start taking my Social Security retirement benefits?
You can claim your benefits anytime between the age of 62 and 70. Don't wait beyond age 70 though, because there is no benefit for doing so. And make sure to file for your benefits about three months ahead of time.
What is the penalty for taking my benefit early?
In an effort to avoid the details of the math calculations, just know that there is an approximate 6.25% reduction in your Primary Insurance Amount for every year earlier than your Normal Retirement Age that you begin taking benefits. As an example, let's see what your benefit would be if you retired at 62 instead of your Normal Retirement Age of 66. Since there are four years between 66 and 62, your benefit reduction would be about 25% (4 X 6.25% = 25%). If your Primary Insurance Amount is $1,000/month at age 66, then your age 62 benefit would be $750/month.
What happens if I delay taking my benefit?
For every year you delay taking benefits after your Normal Retirement Age, but not beyond age 70, your Primary Insurance Amount benefit increases by 8%/year. Let's look at another example and let's assume Normal Retirement Age is 66 again and your Normal Retirement Age benefit is $1,000/month. If you delay taking your benefit until age 70, your benefit will increase by 32% ((70-66) x 8% = 32%) and it will be $1,320/month.