When is the Social Security Retirement Date?

The Social Security program was passed in 1935 by Congress and signed into law by President Roosevelt. It provided a mandated federal retirement plan for American workers. Everyone who was employed gave up a portion of their wages to the government in exchange for an assurance that when they reached a certain age they could retire and have a guaranteed income for life. The Social Security program was in response to a variety of social movements that were demanding that the government do more to help those in poverty. It has since provided a way for scores of millions of people to end their days without sliding into total poverty.

What Determines the Date of Retirement?

The date on which a person can retire is based on two factors. All workers have a "full retirement" date set by the year in which they were born. This is also call the "normal retirement age." Full retirement means that they will receive their full benefit each month. A person born in 1937 or earlier could take full retirement immediately upon turning 65. As the century grew older that age became greater.

When Did the Current Age Freeze?

The full retirement age was bumped up by two months for each year after 1937. For example, people born in 1941 had to wait until they were age 65 and 8 months before receiving their full benefits. From 1943 through 1954 it held steady at just 66 years of age. In 1955 it began the same yearly procession as before. Someone born in 1957 must wait until age 66 and 6 months before retiring with full benefits. In 1960 it froze at age 67 and has remained steady since then.

What is the Earliest Retirement?

People can choose to take social security retirement as early as age 62. If they do, though, they suffer a penalty in the amount of money they receive. The penalty is assessed at five-ninths of 1 percent for 36 months prior to full retirement. If a person retires a year early that would be a 6.6 percent reduction in their monthly payment. There is an additional penalty of five-twelfths of 1 percent for early retirement between 37 and 48 months. If a person retires a full four years early the penalties add up to 25 percent.

What is Late Retirement?

Late retirement is also possible. If someone chooses to delay a social security retirement date he or she receives a bonus each month. The extra payment is figured at 8 percent per year. A wait to 68 will earn 16 percent more each month than a retirement at 66. Of course, this also means that he will receive two years less payments over the final years of his life.

When is the Best Age to Retire?

Deciding when to retire is based upon personal factors. An early retirement gives less benefits but theoretically over a longer period. The cross-over where the two benefits would balance out is about age 77 for someone retiring at age 62 instead of 66. After that point there is more income in the remaining years from the later retirement. If a person is anticipating an early death the early retirement may make financial sense. Another person whose health and finances are good may delay the social security retirement date.

Setting the retirement age at 65 was considered a smart move in 1935. The average life expectancy was only 64 at that time. As the life expectancy grew longer the allowed age of retirement did not keep up. A substantial part of the problem with the social security financial shortfall in the first quarter of the 2000 century has been too many people living longer than the allotted taxes bring in. As a result there is strong consideration in Congress to increasing the age at which a person can retire.

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