Anyone who’s starting to think about retirement needs to know about the normal retirement age for Social Security income. It’s the age at which a person who has paid into Social Security during their working years is entitled to receive the full amount (100%) of the retirement income they’ve earned.
By the time Gen X begins to retire around 2030, normal retirement age will be 67.
Normal retirement age for people retiring right now is 66. By the time Gen X begins to retire around 2030, the normal retirement age will be 67.
Like our elders, we’ll be able to start receiving benefits as early as age 62, but at a fraction of the full amount.
How the Social Security Administration figures it
If you start receiving retirement benefits at:
- age 62, you will get 70% of the monthly benefit because you will be getting benefits for an additional 60 months.
- age 65, you will get 86.7% of the monthly benefit because you will be getting benefits for an additional 24 months.
- age 67, you will get 100% of the monthly benefit you’re entitled to.
Benefits as a spouse
If you start receiving benefits at:
- age 62, you will get 32.5% of the monthly benefit instead of 50% because you will be getting benefits for an additional 60 months.
- age 65, you will get 41.7% of the monthly benefit instead of 50% because you will be getting benefits for an additional 24 months.
- age 67, you will get 50% of the monthly benefit your spouse would receive if their benefits started at full retirement age .
Waiting longer can pay off
If you wait to begin drawing Social Security until after age 67 you can actually increase your income above 100% of what you’re entitled to – by as much as 8% per year. But the latest you can delay starting Social Security is age 70.
Curious how much your Social Security income might be in retirement? You can get an estimate online with the Social Security Retirement Estimator.
For most of us, Social Security will provide only a portion of the income we need to live on in retirement. It’s helpful to know how much (or little) we can count on from Social Security so we figure out what sort of an income gap we’re going to need to fill.
3-legged stool of retirement income
Financial advisors often refer to the concept of a three-legged stool for retirement income consisting of:
- Social Security income
- Pension income
- Personal savings
Since many of us in Gen X won’t have pension income to rely on, we’ll either need to get by on Social Security and personal savings alone, or figure out a substitute for pensions. That might be passive income from investments or it may mean continuing to work later in life.
What you can do now to better prepare for retirement
Of the three legs on the retirement income stool, personal savings is the area we have greatest control over between.
Start doing this now:
- Save and invest as much as you can in retirement accounts.
- Pay off all debt ASAP; that means paying more than the minimum.
- Live a lifestyle you can afford.
Many of us will be retiring in about 15 to 20 years, but we may live for another 20 to 30 years after that.
Bottom line: you can’t save too much!
The good thing is we still have plenty of time take advantage of the power of compounding. And the power of knowledge.
If you don’t feel like you know enough to get ahead click the big YES! button at right (or below on a smartphone) so you can keep getting smarter. And check out my other saving and investing posts.
Retire Gen X 
I’m loving your incredibly useful posts! I can’t believe you don’t have more followers. Have you heard of the Community Pool? You might consider linking some of your articles there to raise awareness of your (awesome!) blog. You’ll have to perform a search for “Community Pool” because they put up a new one every week (Fridays, I think).
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Thanks for the kind words and tips. I’ll check out the Community Pool. I’ve only started pumping out the content in the last couple weeks so I’m not too concerned about the lack of followers. I back dated quite a few so as to intentionally bury some things. I want to fill out more topics before drawing a lot of people to the blog. Thanks again!
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I’m not sure if Social Security every pays out what people have earned. With more than 13% of your pay going into the system your whole working career, people should be getting incomes of $15,000 per month, not $1500. Plus they should be able to leave it to their heirs if they die instead of it all going “poof.” The trouble is the folks running Social Security (Congress) spend any extra money that comes in, and pay out the rest of the new contributions from current workers to those in retirement. I think they call that a Ponzi scheme.
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Based on the ponzi scheme mentality, Gen X would stand to fare pretty well, considering the largest generation in history (Millennials) will still be paying into Social Security when we retire. Somehow, I don’t think it will shake out that way. According to a recent poll I posted on Twitter 9 out of 10 of us are not counting on Social Security at all.
I’ll be happy if Social Security pays my water bill. 🙂
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The issue is that Social Security will fall short before we retire. Four things could then happen 1) It will become means tested and become another welfare program for those who didn’t save 2) Taxes will be raised and we’ll be paying 15% of our paycheck out into the abyss, 3) It will be privatized, leading to great benefits for the millennial generation, but we’ll be out of luck, or 4) it will be scrapped entirely. I’m betting on option 2, unfortunately. No matter what, however, we’ll never see bigger benefits since any extra will just be spent as it always has been. Remember that Ponzi takes a cut.
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Wise words full of good sense. I am a Boomer and retired. I planned ahead for retirement and so I am very fortunate to be living comfortably. My adult children are Millennials and I prattle on to them about retirement planning and they sort of take me seriously. But for them it will be a reality eventually even though at 29 and 32 it is hard for them to imagine.
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