When Can I Retire With Full Social Security Benefits?

by Michael Francis ; Updated July 27, 2017
Scial Security was formed to provide payouts to workers upon retirement

Social Security was formed in 1935 as part of New Deal legislation passed under President Franklin Roosevelt. It was developed as a form of government retirement program, with a defined benefit to elderly workers who had worked throughout their lives. The fund's payments are made through taxes levied of current workers, with the idea that they, too, will eventually benefit when it comes time to retire thanks to workers who succeeded them.

Calculating Social Security Benefits

Your future Social Security benefits are determined by the wages you earned over your career. Social Security takes the wages you earned in your 35 highest-paying years, indexes them to an average wage, and applies a formula to calculate your retirement benefit. You can also go to the Social Security Website to calculate your potential benefits. You should also receive a statement on at least an annual basis informing you of the credits you have accrued and eligible benefits.

Minimum Requirements to Collect Social Security

As you work throughout your life, you earn "credits" under Social Security. In 2011, you earn each credit by accruing $1,120 in wages. You can earn a maximum of four credits per year based on your work and your wages, so for 2011 you would have earned the maximum four credits after earning $4,480.

In order to be eligible for all types of Social Security benefits — retirement, disability, or survivor — you need to accrue 40 credits throughout your career. If you earned the maximum four credits in 10 different years, you are eligible to collect those benefits.

Retiring with Full Social Security Benefits

Full retirement age, as mandated by Social Security, is currently determined to be the date on which you turn 67 years old. This applies to anyone born after 1960. When you turn 67 years old, you are eligible to collect 100% of your defined benefit each month.

There is now an online process available to begin the application process for Social Security. It can take up to four months for Social Security to completely process your application, so if you are below the age of 61 years and 9 months, you cannot use the system. Otherwise, calculate your expected benefit and decide if you wish to file at this time.

Minimum and Maximum Ages to File

Assuming you have collected the minimum number of credits, you can file for Social Security benefits as early as age 62 or as late as age 70. The date you choose to retire, however, will affect the monthly payment you receive for Social Security. Your monthly benefit will be less if you decide to retire early, compared to retiring at 67 or even waiting until 70.

Retiring at age 62 would net you approximately 70% of a monthly payment of what you would have received if you had waited until full retirement.

You must begin drawing payments upon turning 70. Furthermore, at the age of 70 1/2, you would have to begin drawing payments from other retirement plans, such as pensions, 401k plans or IRAs, as well. However, choosing to retire at a later age will increase your monthly payment, due to the fact that your delayed retirement means the Social Security Administration likely has to pay out for a shorter length of time before you die.

About the Author

Michael Francis has been actively writing since 2006. He is a business development analyst who specializes in personal finance, banking and taxation. Francis graduated from Georgia State University with a Master of Business Administration and from Emory University with a B.A. in economics and history.

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