Q. You are considered “eligible” for Social Security at age 62. Do you know when your full retirement age (FRA) begins?
A. Full retirement age for people born between 1943 and 1954 is 66. This is the age at which you may begin receiving your full, unreduced Social Security benefit.
Early eligibility begins at 62. If you apply at this age, your benefit will be reduced. The age at which you apply for Social Security benefits has a tremendous impact on your monthly income and the total amount of benefits you stand to receive over your lifetime. This is one of the crucial aspects of Social Security planning.
Q. How can working effect Social Security benefits?
A. Baby boomers ages 62 to 65 who plan to work and who apply for early benefits will have $1 in benefits withheld for every $2 earned over the earnings-test amount, which is $14,640 for 2012. There is simply no point in taking reduced benefits if all or most of them will be withheld because of the earnings test.
After their 66th birthday, they can earn any amount and no benefits will be withheld. So a person who plans to work in a high-paying job until full retirement age would be advised to wait until age 66 or later to claim benefits.
— Justin Anderson, CFP, CRC, CLU, is a financial planner and Bibi Taylor, MBA, is the Social Security project coordinator at AmeriFlex, 3700 State St., Suite 310, in Santa Barbara. Call 805.898.0893 for more information. Financial advisors and registered representatives associated with AmeriFlex Financial Services offer securities and advisory services through SagePoint Financial Inc., member FINRA/SIPC. Insurance services offered through AmeriFlex Financial Services, which is not affiliated with SagePoint Financial Inc. or registered as a broker-dealer or investment advisor. Registered representatives may only discuss and/or transact securities business with residents of the following states: AR, AZ, CA, CO, FL, GA, IL, IN, MI, MO, NC, ND, NJ, NM, NV, NY, OH, OR, PA, PR, SC, TX, VA, WA, WI.