Social Security benefits replace a percentage of your earnings when you retire, become disabled or die. Each year, we will send you a Social Security Statement showing your earnings history and an estimate of the retirement, disability and survivors benefits you and your family may receive based on those earnings.

When you receive your Statement, check your earnings history carefully. Make sure all of your earnings are accurate. Be sure to report any errors to us. That is important because your benefits will be based on your lifetime earnings. Your Statement also is useful in helping you plan your financial future.

Retirement benefits

Choosing when to retire is one of the most important decisions you will make in your lifetime. If you choose to retire when you reach full retirement age, you will receive your full retirement benefits. But if you retire before reaching full retirement age, you will receive reduced benefits for the rest of your life.

Full retirement age

If you were born before 1938, you were eligible for your full Social Security benefit on your 65th birthday. In 2003, the age at which full benefits are payable began to increase gradually. The following chart will guide you in determining your full retirement age:

Full retirement age
Year of birth	Full retirement age
1937 or earlier	65
1938	65 and 2 months
1939	65 and 4 months
1940	65 and 6 months
1941	65 and 8 months
1942	65 and 10 months
1943-1954	66
1955	66 and 2 months
1956	66 and 4months
1957	66 and 6 months
1958	66 and 8 months
1959	66 and 10 months
1960 or later	67

 

 

 

 

 

 

 

 

 

 

 

NOTE: Although the full retirement age is rising, you should still apply for Medicare benefits within three months of your 65th birthday. If you wait longer, your Medicare medical insurance (Part B) and prescription drug coverage (Part D) may cost you more money.

Delayed retirement

If you choose to delay receiving benefits beyond your full retirement age, your benefit will be increased by a certain percentage, depending on the year you were born. The increase will be added in automatically from the time you reach full retirement age until you start taking benefits or reach age 70, whichever comes first. If, for example, you were born in 1940, your benefit would increase 7 percent for each year, between your full retirement age and age 70, that you do not get retirement benefits.

Early retirement

You may start receiving benefits as early as age 62. However, if you start your benefits early, your benefits are reduced permanently. Your benefit is reduced about one-half of one percent for each month you start your Social Security before your full retirement age. For example, if your full retirement age is 66 and you sign up for Social Security when you are 62, you would only get 75 percent of your full benefit.

NOTE: The reduction will be greater in future years as the full retirement age increases.

If you work and get benefits

You can continue to work and still receive retirement benefits. Your earnings in (or after) the month you reach full retirement age will not reduce your Social Security benefits. In fact, working beyond full retirement age can increase your benefits. However, your benefits will be reduced if your earnings exceed certain limits for the months before you reach your full retirement age.

If you work but start receiving benefits before full retirement age, $1 in benefits will be deducted for each $2 in earnings you have above the annual limit. In 2008, the limit is $13,560.

In the year you reach your full retirement age, your benefits will be reduced $1 for every $3 you earn over a different annual limit ($36,120 in 2008) until the month you reach full retirement age.

Once you reach full retirement age, you can keep working, and your Social Security benefit will not be reduced no matter how much you earn.

For more information about how work affects your benefits, ask for How Work Affects Your Benefits (Publication No. 05-10069).

NOTE: People who work and receive disability or Supplemental Security Income payments have different earnings rules. They immediately must report all of their earnings to Social Security no matter how much they earn.

Retirement benefits for widows and widowers

If you are receiving widow’s or widower’s benefits, you can switch to your own retirement benefits as early as age 62, assuming your retirement benefit is more than the amount you receive on your deceased spouse’s earnings. In many cases, you can begin receiving one benefit at a reduced rate and then switch to the other benefit at the full rate when you reach full retirement age. The rules are complicated and vary depending on your situation, so talk to a Social Security representative about the options available to you.

For more information about retirement benefits, ask for Retirement Benefits (Publication No. 05-10035).

Disability benefits

If you cannot work because of a physical or mental condition that is expected to last at least one year or result in death, you may be eligible for Social Security disability benefits.

Our disability rules are different from those of private plans or other government agencies. The fact that you qualify for disability from another agency or program does not mean you will be eligible for disability benefits from us. And having a statement from your doctor indicating you are disabled does not mean you will automatically be eligible for Social Security disability benefits. For more information about Social Security disability benefits, ask for Disability Benefits (Publication No. 05-10029). You can apply for Social Security disability benefits on our website at www.socialsecurity.gov/applyfordisability.

People with disabilities, including children, who have little income and few resources, also may be eligible for disability payments through the Supplemental Security Income (SSI) program. For more information about SSI, ask for Supplemental Security Income (SSI) (Publication No. 05-11000).

If you become disabled, you should file for disability benefits as soon as possible, because it ­usually takes several months to process a disability claim. We may be able to process your claim more quickly if you have the following when you apply:

• Medical records and treatment dates from your doctors, therapists, hospitals, clinics and caseworkers;
• Your laboratory and other test results;
• The names, addresses, phone and fax numbers of your doctors, clinics and hospitals;
• The names of all medications you are taking; and
• The names of your employers and job duties for the last 15 years.

Your benefits may be taxable

Some people who get Social Security will have to pay taxes on their benefits. Less than one-third of our current beneficiaries pay taxes on their benefits.

You will have to pay taxes on your benefits if you file a federal tax return as an “individual” and your total income is more than $25,000. If you file a joint return, you will have to pay taxes if you and your spouse have a total income that is more than $32,000. For more information call the Internal Revenue Service’s toll-free number, 1-800-829-3676.