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Social Security Benefits for early retirement

Posted by Andrew Chan  March 1, 2010 04:30 PM

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If I start receiving my social security benefit at age 62 and continue to work, I understand that there will be an offset over a certain threshold. If I only work for two years, not reaching FRA, will my social security be fully restored, with no offset?

In general, the total value of your Social Security retirement benefits are estimated to be the same whether or not you elect to receive your Social Security retirement benefits before or at your full retirement age (FRA) assuming that you live to an average age. Therefore, if you elect to start your Social Security retirement benefits before you reach your FRA, the amount of your monthly benefits will be permanently reduced to reflect the fact that you will receive retirement benefits for a longer period of time than you would if you had waited until your FRA.

This reduction is permanent and is calculated based on how early - before your FRA, you begin to receive benefits. In some cases, this reduction can be as much as 30 percent of the amount you would receive if you wait until your FRA. You can start receiving your Social Security retirement benefits as early as age 62.

In addition to receiving a permanently reduced retirement benefit for early retirement, anyone who receives retirement benefits before their FRA is subject to the following earnings tests:
  • If you are under your FRA throughout 2010, your permanently reduced benefits will be further reduced by $1 for every $2 earned above the $14,160 limit.
  • If you will reach your FRA in 2010, your permanently reduced benefits will be reduced by $1 for every $3 earned above the $37,680 limit. This applies to the months in 2010 before you reach your FRA.
  • Beginning with the month in which you reach your FRA, you will no longer be subject to an earning test.
Any reductions in your retirement benefits due to the earning test will be added back to your benefits once you reach your FRA. However, reductions in your benefits due to early retirement (i.e., taking retirement benefits before your FRA) are not generally restored once you reach your FRA.

For more information, visit the Social Security Administration's web site at www.ssa.gov.
This blog is not written or edited by Boston.com or the Boston Globe.
The author is solely responsible for the content.

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