1. Collecting Social Security Too Early Can Reduce Your Payout
Employers take money out of workers' paychecks for Social Security taxes. In return, workers earn "credits" toward benefits. The number of credits you need to get full retirement benefits varies depending on when you were born.
If you were born in 1929 or later, you need 40 credits, which translates to 10 years of work. Your credits remain on your Social Security record even if you stop working before you earn enough qualifying credits. That way, you can return to work at a later time and add the new credits to the old so you can qualify for benefits. If you don't have enough credits, however, you cannot collect benefits.
To receive your full Social Security benefits, you must apply at your full retirement age. Anyone born between the years 1943 and 1954 is eligible for full benefits at age 66.
If you were born in 1955 or after, the age at which you can collect full benefits gradually increases to age 67. Although 65 is no longer the magic age to collect your full retirement, you should apply up for Medicare three months before you reach that age.
You can apply for Social Security benefits prior to your full retirement age. But if you do so, your monthly benefit will be substantially lower than what you'll get by waiting until full retirement age or beyond.
Also Read: Things Everyone Gets Wrong About Social Security
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