• Question
  • Stop working at 62 but don't collect until 66

    Asked on 7/9/2010

    My social security statement shows the amount of my benefit if I stop working and collect at 62. Then how much I can collect if I keep working until full retirement age of 66 or 70. What if I stop working at 62 but don't collect until full retirement age? Will the amount still increase by delaying collecting and will it increase as significantly or will it be pretty much the same as if I started collecting at 62?

  • Categories: Work and Retirement, Delaying Retirement, Social Security, When to Start?


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  • Social security has a formula they use to calculate your Primary Insurance Amount (PIA). Whenever you stop working your PIA will be calculated based on all the money you earned that was taxed by social security. PIA equals the amount of money you will receive in social security benefits per month if you choose to wait until full retirement (which I guess is 66 for you) to receive benefits. For example, if you stop working at 62 and your PIA is 2,000, this number will not change if you never make any more money that’s taxed by social security (unless congress changes how PIA is calculated or adjusts the amount to account for inflation). So if you wait until you are 66 before receiving benefits then your PIA of 2,000 (that you accumulated up until the age of 62) is what you will receive per month from social security. Now if you decide to take social security benefits at the age of 62 you get the amount that you see on your social security statement that shows what you get if you stop working and collect at 62. This amount that you see is not your PIA, rather it is a certain percentage of your PIA because you won’t get the full PIA amount if you take benefits at 62. If you stop working at 62 your PIA will be lower than the amount your statement is showing you will receive at 66 because the social security statement assumes you will continue working until the age of 66. The following website will calculate what percentage of your PIA you will get if you choose to collect benefits at age 62. Once you find out that percentage all you have to do is follow the example below to calculate what your PIA actually is.
    For example, my full retirement age is 67. Once I enter the necessary information in the following link (for your retirement year, enter the year that you will turn 62. For the retirement month, choose the month right after your birth month).
    It calculates that my social security benefits will be 70.42% of my PIA if I choose to take benefits at 62. Your percentage may be different. Now if my social security benefits at age 62 are estimated to be 1,500 I can calculate what my PIA is by taking 1,500 and dividing it by 70.42% or .7042.
    1,500/.7042 = 2,130 This is my PIA. This is what I will be receiving per month in social security benefits if I stop working at 62 and don’t collect social security benefits until my full retirement age. This amount is less than what my social security statement is estimating I will receive if I work until my full retirement age and it should be because my statement calculates my full retirement benefits assuming I will continue working past age 62
    Hope this helps.

  • Login to rate this answer:   Answered on 4/30/2011
  • NewRetirement User

    72 year old from Houston, TX

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  • Hello there,

    The amount of money you stand to receive from social security benefits does increase over time if you choose to delay your benefits past the minimum age of 62. The full explanation of how the system works can be found here: https://www.newretirement.com/Services/Social-Security-When-To-Start.aspx

    In short, if your full retirement age is 66, then the amount you qualify for at age 62 is roughly 26% less than your "full" retirement benefits, which you would receive at age 66. If you choose to delay the benefits beyond that point, then you will receive a bonus of between 3 and 8% (depending on your birth-year) to your social security for every year that you delay your benefits up to the age of 70.

    We strongly suggest you try our our Social Security Starting Age calculator to determine what the best strategy for maximizing your benefits is. The calculator can be found here: https://www.newretirement.com/Services/Social_Security_Start_Age_Calculator.aspx

  • Login to rate this answer:   Answered on 7/12/2010
**All above answers are provided as general information only. No warranty is made regarding the fitness or accuracy of the information provided in this answer. You should seek advice from a licensed CPA, attorney or CERTIFIED FINANCIAL PLANNER™ as to your unique financial situation.