RETIREMENT

Question:  How are my retirement benefits calculated?

Answer:  Your Social Security benefits are based on earnings averaged over your lifetime. Your actual earnings are first adjusted or “indexed” to account for changes in average wages since the year the earnings were received. Then we calculate your average monthly indexed earnings during the 35 years in which you earned the most. We apply a formula to these earnings and arrive at your basic benefit. This is the amount you would receive at your full retirement age.  You may be able to estimate your benefit by using our Retirement Estimator, which offers estimates based on your Social Security earnings. You can find the Retirement Estimator at www.socialsecurity.gov/estimator.

Question:  I know that Social Security’s full retirement age is gradually rising to 67. But does this mean the “early” retirement age will also be going up by two years, from age 62 to 64?

Answer:  No. While it is true that under current law the full retirement age is gradually rising from 65 to 67, the “early” retirement age remains at 62.  Keep in mind, however, that taking early retirement reduces your benefit amount. For more information about Social Security benefits, visit the website at www.socialsecurity.gov.

MEDICARE

Question:  If I retire and start getting Social Security retirement benefits at age 62, will my Medicare coverage begin then too?

Answer:  No. Medicare benefits based on retirement do not begin until a person is age 65. If you retire at age 62, you may be able to continue to have medical insurance coverage through your employer or purchase it from an insurance company until you reach age 65 and become eligible for Medicare. For more information about who can get Medicare, visit www.medicare.gov.

 

GENERAL

Question:  I am receiving Social Security retirement benefits and I recently went back to work. Do I have to pay Social Security (FICA) taxes on my income?

Answer:  Yes. By law, your employer must withhold FICA taxes from your paycheck. Although you are retired, you do receive credit for those new earnings. Each year Social Security automatically credits the new earnings and, if your new earnings are higher than in any earlier year used to calculate your current benefit, your monthly benefit could increase. For more information, visit www.socialsecurity.gov.