Understanding Social Security Benefits After Retirement Age

Many individuals ask questions regarding the social security benefits they receive once they retire at 65. This article aims to clarify the rules and benefits that individuals can expect after reaching their full retirement age of 66. You will need to contact your social security office for specific rules or unique circumstances, but we will cover the general guidelines here.

Fixed Benefit Amount

When you retire at 65 and start collecting Social Security benefits, the monthly total is set and lock-in for the most part. You are locked into that number, plus any yearly increases for inflation, unless you should continue working simultaneously.

If you are regularly working, you must stop working at the beginning of the year you are retiring. However, if you wish to maximize your benefits, it is often recommended to continue working until you turn 70. Working an additional six months and then quitting at 70 will allow you to receive six months of benefits all at once, which can be beneficial for cash flow.

No Change in Benefit Amount

Your initial payment once you start taking benefits will remain the same. Once you begin taking Social Security benefits, that percentage of your full retirement benefit becomes permanent. If you start taking benefits at 65, you will only receive 93% of your full retirement benefit. Any additional cost of living adjustment (COLA) will apply to the 93% figure. Therefore, even if the cost of living increases, your benefit will be calculated at 93% of the new amount, meaning you never recover from retiring early.

Staying with Your Awarded Pension

Your Social Security pension amount will remain the same as the one awarded at the time of your initial application, except for annual COLA adjustments. Any raises authorized by Congress after your initial application will be reflected in your benefit amount. These raises might not be the same if you had waited until the full retirement age of 66 to start collecting benefits.

No Further Increases Based on Age

Once you start collecting Social Security benefits, you are locked into your current monthly amount, unless you are still working over the limit and it affects your benefits. There is a COLA every year for all beneficiaries based on inflation rates, but this does not contribute to a further increase based on your age.

Enrollment for Medicare

It is also important to remember that as a retiree, you should apply for Part B of Medicare within the first six months of your retirement. If you miss this opportunity, you may face higher premiums deducted from your Social Security benefits in the future.

Conclusion

Understanding the rules and benefits of Social Security can be confusing, but it is important to plan accordingly. If you need specific advice or further clarification, it is advisable to contact your local Social Security office. For questions on Social Security benefits post-retirement, your full retirement age, and cost of living adjustments, the information provided in this article should serve as a helpful guide.