Social Security Guidelines for Early Retirement
- You must earn at least 40 credits over your working career before you can collect Social Security retirement benefits. Social Security credits you with one work credit after you earn $1,200 in gross wages. Four credits is the total amount of work credits the Social Security Administration allows you to earn in one year. The amount of gross wages you earn during your working career determines the amount of monthly benefits you receive from Social Security. Therefore, earning higher wages can increase the amount of money you receive in your monthly Social Security retirement checks.
- The earliest you can retire and collect Social Security benefits is at 62 years of age. However, retiring early causes the amount of monthly benefits you receive to be lower. The year you were born also impacts how much your benefits are reduced if you retire early, as Social Security early retirement guidelines have changed over the years. For example, if you were born in 1937 or earlier and you retired when you turned 65, your retirement benefits are reduced by 20 percent. However, if you were born in 1960 or later and you retire at 67 years old, your benefits are reduced by 30 percent.
- As soon as you turn 70 years old, you have reached full retirement age and can collect the full amount of your Social Security retirement benefits, unless you filed to collect the benefits early. If you wait until after you have passed 70 years of age, the amount of retirement benefits that you receive does not increase.
- If you retire before you turn 70 years old, you can only earn $14,460 a year working a part-time or full-time job as of April 2011. After you earn more than $14,460 a year, the Social Security Administration deducts $1 for every $2 you earn above the allowable limit. For example, if you retire at the age of 65 and you earn $14,470 a year, the administration will deduct $5 from your retirement benefits. However, once you reach the year of your full retirement age, you can earn up to $37,680 before the administration starts deducting income from your monthly Social Security benefits. The year you turn 70 years old, but before your 70th birthday, if you earn more than $37,680 in working income, the administration deducts $1 for every $3 you earn above the allowable limit. For example, if you were born June 1, 1941, and you started collecting Social Security retirement benefits Jan. 1, 2011, if you earn more than $37,680 before your 70th birthday, the administration will deduct money from your benefits. However, after you turn 70 on June 1, 2011, you can earn as much as you want without having money deducted from your retirement benefits.