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Taking Care of Mom and Dad: Starting Early and Starting Late

Your parents can start their Social Security retirement benefits as early as age 62, but the benefit amount they receive will be less than their full retirement benefit amount. If they start their benefits early, the benefits will be permanently reduced based on the number of months between their age at their early retirement and their full retirement age. If their full retirement age is 65, the reduction is 6.66 percent for each year they retire early. For example, their benefits at age 62 will be reduced 20 percent; at age 63, 13.33 percent; and, at age 64, 6.66 percent.

If their full retirement age is older than 65 (that is, they were born after 1937), they can still start their retirement benefits at 62. But the reduction in their benefit amount will be greater, up to a maximum reduction of 30 percent at age 62 for people born in 1960 and later.

Social Security benefits are increased (by a certain percentage depending on a person's date of birth) if retirement is delayed beyond full retirement age.

The benefit increase no longer applies when people reach age 70, even if they continue to delay taking benefits.

Increase for Delayed Retirement

Yearly Rate of Increase Monthly Rateof Increase DOB
4.5% 3/8 of 1% 1930
5.0% 5/12 of 1% 1931-1932
5.5% 11/24 of 1% 1933-1934
6.0% 1/2 of 1% 1935-1936
6.5% 13/24 of 1% 1937-1938
7.0% 7/12 of 1% 1939-1940
7.5% 5/8 of 1% 1941-1942
8.0% 2/3 of 1% 1943 or later

Note: People born on January 1 of any year should refer to the rate of increase for the previous year.

Social Security Full Retirement and Reductions by Age*

Year of Birth Full Retirement Age Age 62 Reduction Months Monthly % Reduction Total % Reduction
1937 or earlier 65 36 .555 20.00
1938 65 and 2 months 38 .548 20.83
1939 65 and 4 months 40 .541 21.67
1940 65 and 6 months 42 .535 22.50
1941 65 and 8 months 44 .530 23.33
1942 65 and 10 months 46 .525 24.17
1943 -- 1954 66 48 .520 25.00
1955 66 and 2 months 50 .516 25.84
1956 66 and 4 months 52 .512 26.66
1957 66 and 6 months 54 .509 27.50
1958 66 and 8 months 56 .505 28.33
1959 66 and 10 months 58 .502 29.17
1960 and later 67 60 .500 30.00

* Percentage monthly and total reductions are approximate due to rounding. The actual reductions are .555 or 5/9 of 1 percent per month for the first 36 months and .416 or 5/12 of 1 percent for subsequent months.

Your parents can also retire at any time between age 62 and full retirement age. However, if they start at one of these early ages, their benefits are reduced a fraction of a percent for each month before their full retirement age.

As a general rule, early retirement will give your parents about the same total Social Security benefits over their lifetimes, but in smaller amounts to take into account the longer period they will receive them.

There are disadvantages and advantages to taking benefits before full retirement age. The advantage is that your parents collect benefits for a longer period of time. The disadvantage is that your parents' benefits are permanently reduced. Each person's situation is different, so it's critical to help your parents assess their retirement needs and decide the best age to begin collecting Social Security benefits.

Because Social Security benefits are no longer reduced for amounts earned after your parents reach full retirement age, it makes little sense to delay taking benefits -- especially if they keep working. The increases in benefit amounts don't make up for the lost benefits that could have been collected at age 65.

Remember: If your parents decide to delay their retirement, be sure they sign up for Medicare at age 65.

In some circumstances, medical insurance costs more if they delay applying for it. The previous page shows a chart for understanding "full retirement" and the amount of benefits your parents will receive based on their age. Remember, no matter what their full retirement age (also called "normal retirement age") is, they may start receiving benefits as early as age 62.

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