When am I eligible for Social Security Benefits

How to become eligible for Social Security benefits

To qualify for retirement benefits you must have paid into Social Security tax while you were working and earned “credits” toward benefits. The number of credits you need to be eligible for social security benefits depends on the year that you are born.  If your birth year is 1929 or later, you must have 40 credits, the equivalent of 10 years of work. Social security benefits can not be paid until the required amount of credits is obtained.

Determining how much Social Security you will receive

When to apply to social security

The Social Security payment that you will receive is based on the amount you earned during your working career. The more money you earned the higher your benefit. Other factors such as the age at which you start pulling from your Social Security also affect the payment amount.

Create a mySocialSecurity account to look at your Social Security statement.

When you are eligible for Social Security Benefits 

The full retirement age varies (see figure below). If you have a retirement age of 66 then you would be able to start drawing on your social security with a 25% penalty at age 62. In addition, if you choose to delay collecting each year, up to age 70, your benefits are increased by 8%.

If you were born in … Your full retirement age is …
1937 or earlier 65
1938 65 and 2 months
1939 65 and 4 months
1940 65 and 6 months
1941 65 and 8 months
1942 65 and 10 months
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

Factors to consider

When deciding if you want to take money from your Social Security, there are many factors to consider. Taking money out too soon could mean settling for lower monthly payments.

Eligible for social security benefits
Photo credit: forthepeople.com

1. Your instant cash needs. If you are financially sound without the help of social security then it is better to leave your social security and gain 8% interest per year until you have to start taking it. If you are just making ends meet with the help of a social security check, postponing retirement till you meet your full requirement age, is a better option.

2. Your life expectancy and break even age.  If you take your social security before your full time retirement age, you will be receiving a lower payment each month for a longer period of time. The alternative is taking social security later and receiving fewer larger checks.

Calculate your break even age to plan when the best time to apply for your benefits in order to optimize your benefits.

Monthly Social Security benefits Retirement age Break-even age
$1,992 62 vs. 66 Between 77 and 78
$2,676 62 vs. 70 Between 80 and 81
$3,557 66 vs. 70 Between 83 and 84

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