But for every month you claim your benefits before reaching FRA, they’ll shrink on a permanent basis. If you want to avoid that hit, you’ll need to learn your FRA and wait until that age arrives to sign up for Social Security. You can consult this table to see what your FRA looks like.
|
Year of Birth |
Full Retirement Age |
|---|---|
|
1943-1954 |
66 |
|
1955 |
66 and 2 months |
|
1956 |
66 and 4 months |
|
1957 |
66 and 6 months |
|
1958 |
66 and 8 months |
|
1959 |
66 and 10 months |
|
1960 or later |
67 |
Data source: Social Security Administration.
2. Your total retirement income is too high
If Social Security is your only retirement income source, you’ll probably manage to avoid federal taxes on your benefits. But if you have other streams available to you, like retirement plan withdrawals or earnings from a part-time job, your benefits might shrink by virtue of getting taxed.
Whether that happens depends on your provisional income, which is your non-Social Security income plus 50% of your annual benefit. Once that total reaches $25,000 for singles and $32,000 for couples, taxes on benefits can apply.
