One of the most common planning topics we discuss with clients is social security planning. This is an important asset in retirement and something you should understand. The first step in social security planning is to determine your Full Retirement Age (FRA). This is the earliest age that Social Security has determined that you are eligible for your full benefit. Below is a chart to help determine your FRA:
| Birth Year | Full Retirement Age |
| 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 or later | 67 |
With this information we can now determine the best time to choose social security. If you take your benefit before your FRA than you will receive a permanent reduction in social security benefits. However, for each year you delay you will receive a raise of 8% permanently. Below is a chart to summarize how much benefit you will receive at different ages:
| Age Benefits Begin | Full Retirement Age of 66 | Full Retirement Age of 67 |
| 62 | 75% | 70% |
| 63 | 80% | 75% |
| 64 | 86.7% | 80% |
| 65 | 93.3% | 86.7% |
| 66 | 100% | 93.3% |
| 67 | 108% | 100% |
| 68 | 116% | 108% |
| 69 | 124% | 116% |
| 70 | 132% | 124% |
This chart should illustrate the benefits of delaying social security, especially if longevity is on your side. If there are health issues or you just need the money you may need to consider taking social security sooner.
For example, assume a person will receive $24,000 a year ($2,000/month) benefits at Full Retirement Age of 67. Below is a summary of the annual benefit they would receive by taking social security at different ages.
| Start Age | Annual Benefit |
| 62 | $16,800 |
| 67 | $24,000 |
| 70 | $29,760 |
For most people, the age where they would receive the same lifetime benefits is between 78-80 years. You will receive substantially more benefits over your lifetime by delaying social security if you live past age 80.
Taking social security is an important decision and we are here to help guide you through this process. The general rule is that you want to wait if there is longevity and you can afford to, but of course, it is best to contact us to review your individual circumstances.
