We may earn a commission for purchases through links on our site at no cost to you, Learn more. All trademarks and brand names are the property of their respective owners. All product and service names used in this website are for informational purposes only. Use of these names and brands does not imply endorsement.
- Social Security benefits depend on factors like work history, earnings, and claiming age.
- Full retirement age (FRA) is the age you can claim Social Security without penalty; it varies between 66 and 67.
- Claiming at 63 results in a reduced monthly benefit, typically 25-30% less than at FRA.
- Delaying Social Security beyond FRA increases monthly benefits, with a boost for every year you wait until age 70.
- The SSA provides an online calculator to estimate your benefits based on your work history and claiming age.
- Lifetime earnings, marital status, and other benefits like disability or survivor benefits can affect Social Security amounts.
- Taxes on Social Security benefits can apply if your total income in retirement exceeds certain thresholds..
- Delaying benefits increases the long-term payout, but claiming early provides immediate income.
- Use the SSA’s calculator to better understand your potential benefits at various ages.
Social Security is a crucial part of retirement planning in the United States. For many, understanding how much they will receive from Social Security can help them plan better for their financial future. If you are approaching 63, you might wonder, “How much Social Security will I get at age 63?”
In this blog post, we will explain how Social Security benefits are calculated and what factors influence the amount you will receive at age 63. We will also break down different aspects of Social Security, including the impact of early retirement, full retirement age, and how to estimate your benefits.
How Much Social Security Will I Get at Age 63?
Social Security is a government program designed to provide financial support to people in retirement, those who are disabled, and survivors of deceased workers. It is funded through payroll taxes that are deducted from your earnings during your working years. When you retire, you can claim Social Security benefits based on your work history and the amount you have paid into the system.
The amount you will receive from Social Security depends on several factors, including your earnings over your career, the age at which you begin claiming benefits, and your work history.
One common question is, “How much Social Security will I get at age 63?” This question is particularly relevant because many people choose to retire early, before reaching the official retirement age. While taking Social Security benefits at 63 might seem appealing, it is important to understand the potential financial impact of this decision.
What is Full Retirement Age?
Before addressing how much Social Security you can expect to receive at age 63, it’s essential to understand the concept of “full retirement age” (FRA). Full retirement age is the age at which you are eligible to receive your full Social Security benefit, without any reductions for early retirement. For people born between 1943 and 1954, the full retirement age is 66. However, for those born after 1954, the full retirement age increases gradually, reaching 67 for people born in 1960 or later.
If you begin receiving benefits before your full retirement age, your benefits will be reduced. This means that if you choose to claim Social Security at 63, you will receive a smaller monthly benefit than if you waited until your FRA or even 70.
How Much Will You Lose by Claiming Social Security at 63?
To determine how much Social Security you will get at age 63, it’s essential to understand the impact of claiming early. Social Security benefits are designed to increase the longer you wait to claim them, up to the age of 70. If you claim benefits at 63, you will face a reduction of around 25-30% compared to the amount you would receive if you waited until your full retirement age.
For example, if your full retirement age is 66 and your monthly benefit at FRA would be $1,500, claiming at 63 would reduce your benefit to around $1,125 per month. This is because you are choosing to receive your benefits early, and Social Security applies a reduction for each month before your full retirement age. The reduction is permanent, meaning that your monthly benefit will remain lower for the rest of your life.
It’s important to note that while taking Social Security early reduces your monthly benefit, it can be advantageous in certain situations. If you need the income immediately or have health concerns, claiming at 63 might be the best choice. However, it’s critical to weigh the long-term consequences before making this decision.
How Much Social Security Will I Get at Age 63 if I Wait Until Full Retirement Age?
You might be wondering, “How much Social Security will I get at age 63 if I decide to wait until my full retirement age?” If you choose not to claim your benefits at 63 and instead wait until your full retirement age, you will receive a higher monthly payment. The closer you are to your full retirement age, the more beneficial it becomes to delay claiming Social Security.
For example, if you are 63 and your full retirement age is 66, you have three more years to work before you can claim your full benefit. By waiting, you can increase the amount of Social Security you will receive each month.
Additionally, delaying benefits until after your full retirement age (up until 70) will further increase your monthly benefits, as you will earn “delayed retirement credits” for each year you delay.
For many people, waiting until their full retirement age or later can significantly increase their monthly benefits. However, this is not always the best option for everyone, especially if you need access to the funds immediately or have other sources of income.
Estimating Your Social Security Benefits
One of the most helpful tools for understanding how much Social Security you will get at age 63 is the Social Security Administration’s (SSA) online calculator. This tool allows you to estimate your benefits based on your work history and earnings.
To get a more accurate estimate, you can also create a “my Social Security” account on the SSA website. This account gives you access to your personal earnings record and benefit estimates.
The SSA calculator takes into account factors such as:
Your work history:
The SSA looks at your highest 35 years of earnings to calculate your average indexed monthly earnings (AIME). The AIME is then used to determine your primary insurance amount (PIA), which is the amount you are eligible to receive at full retirement age.
Your claiming age:
The earlier you claim Social Security, the lower your monthly benefits will be. The SSA calculator accounts for this by adjusting the PIA based on the age at which you choose to start your benefits.
Cost-of-living adjustments (COLA):
Social Security benefits are adjusted each year for inflation through COLA. The SSA calculator also includes these adjustments in your estimates, helping you get a more realistic projection of future benefits.
By using the SSA calculator, you can get a better idea of how much you will receive at 63, 66, or 70 based on your individual work history and earnings.
Factors That Affect Your Social Security Benefits
While age is a major factor in determining how much Social Security you will get, there are other factors that can influence your benefits. Here are a few key aspects to keep in mind:
Lifetime earnings:
The more you earn over your career, the higher your Social Security benefits will be. The SSA bases your benefit amount on your highest 35 years of earnings, so consistently high earnings can result in a higher monthly benefit.
Spouse’s benefits:
If you are married, your spouse may be eligible for Social Security benefits based on your work history, or vice versa. This can influence the amount you both receive, particularly if one of you earned significantly more than the other.
Disability or survivor benefits:
If you are disabled or a surviving spouse, you may be eligible for benefits that are different from regular retirement benefits. These benefits are typically based on your work history, and the SSA has specific rules for calculating them.
Taxes on Social Security benefits:
It’s important to note that Social Security benefits can be subject to income tax, depending on your overall income in retirement. If you have significant other income, part of your Social Security benefits may be taxable.
When Is the Best Time to Claim Social Security?
The best time to claim Social Security depends on your financial situation, health, and retirement goals. While claiming at 63 might seem tempting due to the immediate income, it’s essential to weigh the long-term consequences.
By delaying your benefits until full retirement age or beyond, you can increase your monthly benefit, which can be beneficial in the long run, especially if you live a long life.
If you are in good health and can afford to wait, delaying your benefits may make sense. However, if you need the income now or have health concerns that make you unsure about your longevity, claiming early could be a better choice.
Frequently Asked Questions
Here are some of the related questions people also ask:
What happens if I claim Social Security at age 63?
Claiming Social Security at age 63 will reduce your monthly benefit by about 25-30% compared to waiting until your full retirement age.
How can I estimate how much Social Security I will get?
You can estimate your Social Security benefits by using the Social Security Administration’s online calculator or by creating a “my Social Security” account to access personalized estimates.
Is it better to take Social Security at 63 or wait until 66?
It depends on your financial situation. Waiting until 66 (full retirement age) will increase your monthly benefit, but taking it at 63 provides earlier access to funds, though at a reduced amount.
How much will my Social Security be reduced if I claim at 63?
If you claim at 63, your benefits will be reduced by around 25-30% compared to what you would receive at your full retirement age (66 or 67).
What is full retirement age for Social Security?
Full retirement age is 66 for people born between 1943 and 1954, gradually increasing to 67 for those born in 1960 or later.
Can I work while receiving Social Security at age 63?
Yes, you can work while receiving Social Security at age 63, but if you haven’t reached full retirement age, your benefits might be reduced depending on how much you earn.
How does delaying Social Security until 70 affect my benefits?
Delaying Social Security until age 70 can increase your monthly benefits, as you earn delayed retirement credits for each year you wait beyond full retirement age.
Are Social Security benefits taxable?
Yes, Social Security benefits can be subject to income tax depending on your total income during retirement.
Can my spouse claim Social Security benefits based on my earnings?
Yes, if you are married, your spouse can claim benefits based on your work history, which might be higher than their own, depending on their earnings.
The Bottom Line: How Much Social Security Will I Get at Age 63?
Understanding “how much Social Security will I get at age 63?” is an important part of retirement planning. Your decision on when to claim Social Security can have a significant impact on your monthly benefits and your overall retirement income.
By understanding how Social Security is calculated, including factors such as full retirement age and the reduction for early claiming, you can make a more informed decision.
While claiming at 63 can provide immediate benefits, it comes with the trade-off of a reduced monthly payment. It’s important to consider your individual situation, including your health, finances, and retirement goals, when making this decision.
Utilizing tools such as the SSA’s online calculator can give you a clearer picture of what to expect. Ultimately, your decision should align with your financial needs and long-term goals to ensure a comfortable retirement.