Math with Dick and Jane: Should Jane collect Social Security as soon as she turns 62?

  1. When is the earliest I can start collecting? — Age 62
  • If you were born before 1955, that age is 66.
  • For those born in 1960 or later, the age is 67.
  • If you were born from 1955 to 1959, add two months to for every year after 1954 (or subtract two for every year before 1960. For example, if you were born in 1959, you reach full retirement age at 66 years and 10 months old.
  • If you were born before 1955, you would get 75% of your benefit.
  • If you were born after 1960 or later, you would get 70% of your benefit.
  • If you were born from 1955 to 1959, the formula is a bit more complicated. The amount of the reduction depends on how many months there are until you reach your full retirement age. The formula is as follows:
  • Less than 36 months from full retirement age — Your benefit is reduced by 5/9ths of a percent (0.56%) for each month until your full retirement age. If it is exactly 36 months, that would be a 20% reduction
  • More than 36 months away from full retirement age — Your reduction would be 20% for the first 36 months plus 5/12ths of a percent (0.417%) for the remaining months until full retirement age.
  • For example, if you were born in 1959, your full retirement age is 66 years and 10 months. If you started taking payments at age 62, 58 months early, you would get a 20% reduction for the first 36 months, plus an additional 9.17% reduction for the next 22 months for a total reduction of 29.17%. In other words, you would receive 70.83% of your full retirement benefit if you started at age 62.
  • If you were born in 1959, that number is 58 months (four years and 10 months)
  • If you were born in 1960 or later, that number is 60 months (five years).
  • You would receive 70% of your full benefit payment instead of 100% if you waited until your 67th birthday.
  • In other words, in the 60 months between age 62 and your full benefit age of 67, you would be getting the equivalent of (0.70)*60 = 42 full benefit payments.
  • You would continue to get 70% of your full benefit payments even after you reach your full retirement age of 67.
  • NF > (P)(F)(N + M)
  • Since F is multiplying both sides of the equation, divide both sides by F to get:
  • N > (P)(N + M)
  • Solving for N gives N > (P)(M)/(1–P), and substituting 60 for M and 0.7 for P gives:
  • N > 60(0.7/0.3) = 140
  • This means that if you wait until full retirement age, you would start to get more money than starting at age 62 at age 78 and nine months, 141 months (11 years and nine months) after reaching the full retirement age of 67.

Looking at it in a different way with Dick and Jane

Cover art from Fun with Dick and Jane: A Commemorative Collection of Stories by Scott Foresman

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Former USAF and Boeing engineer and creator of aviation safety and security site AirSafe.com.

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Todd Curtis (airsafe)

Todd Curtis (airsafe)

Former USAF and Boeing engineer and creator of aviation safety and security site AirSafe.com.

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