How The New Retirement Age Could Affect Your Employees

 

Nearly every worker’s dream is to have a secure retirement to enjoy the fruits of their labor. Social Security is here to help your employees secure today and tomorrow. Part of that commitment is to ensure that your employees have the most up-to-date information so they can make the most advantageous retirement decisions.

You may have heard that 2017 is bringing changes to Social Security retirement beneficiaries. These changes affect full retirement age, also called “normal retirement age.” Full retirement age is the age at which a person may first become entitled to full or unreduced retirement benefits. 

For many years, full retirement age was when a person turned age 65.  However, beginning with people born in 1938 or later, that age has been gradually increasing until it reaches 67 for people born in 1960 and later.

As the full retirement age increases, there are greater reductions in benefits if claimed before reaching full retirement age.  For example, if you apply for benefits in 2017 at age 62, your monthly benefit amount is reduced by nearly 26 percent.

Your employees can learn more about the full retirement age on our website and how to determine their own.

The age at which your employees retire not only affects them but also their spouse and dependent children, and their survivors in the event of the worker’s death. Educating your employees about full retirement age, and its effects on their retirement benefits, can help your employees make better informed decisions for themselves and their families.

Here are five important things your employees need to know:

  1. They may start receiving Social Security benefits as early as age 62 or as late as age 70. The longer they wait, the higher their monthly benefit will be.
  2. Monthly benefits will be reduced if started any time before full retirement age.
  3. If they elect to receive benefits before reaching full retirement age, they should understand how continuing to work can affect their benefits.
  4. If they die, their retirement date can affect the payment to their surviving loved ones. If they started receiving retirement benefits before full retirement age, we cannot pay the full retirement age benefit amount to their survivors. Their benefit amount will be based on the employee’s reduced benefits.

Your employees can learn more by reading our publication When to Start Receiving Benefits or visiting our Retirement Estimator.  

Social Security is with you throughout life’s journey. Encourage your employees to visit our website to make sure they’re on their way to a secure retirement. 

 

 

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