What are Social Security retirement benefits?

People who were born before 1938 are eligible for full social security retirement benefits at age 65.

Beginning in 2003, the age at which full retirement benefits are payable will increase from 65 to age 67, in a series of gradual steps, those of you who were born in 1940 become eligible for full Social Security retirement benefits at age 65 and 6 months, those born in 1950 are eligible at age 66 and those of you who were born in 1960 or later become eligible for full retirement benefits at age 67.

You may, however, begin receiving reduced benefits as early as age 62. If you take this early reduced retirement benefit, your monthly benefit is permanently reduced - although you will be able to collect benefits for a longer period of time.

If you work beyond your full retirement benefit age, the extra income during those years generally increases your average earnings and thus the amount of your monthly retirement benefit. In addition, you will be given a special credit (5% for people who turn age 65 in 1996 gradually increasing to 8% for people who turn age 65 in the year 2008 or later) which permanently increases your social security retirement benefit.

To determine how much your benefit will be, obtain a Personal Earnings and Benefit Estimate Statement (through the procedure discussed above).