Full Retirement Age – Born 1958

So, you find yourself sitting back on a late summertime afternoon and maybe relaxing a bit, already retired, or getting close to doing so, and you’re reflecting. You’re probably thinking to yourself, “I was born in 1958, and the world was a pretty cool place back then.”

World War II was thankfully in the rearview mirror, Dwight Eisenhower established NASA, Edmund Hillary reached the South Pole, Jerry Lee Lewis’ “Great Balls of Fire” was a hit, the U.S. launched its first satellite, Elvis Presley joined the army, and so much more.

Oh yeah, and you came along.

Now you’ve lived a lot of life and it’s 2024 (or thereabouts), the year you actually reach you’re full retirement age or FRA.

While there’s plenty of considerations and issues to attend to, a major one at this point is determining if you want to start receiving your full Social Security benefits, if you didn’t already start receiving them when you turned age 62.

Assuming you didn’t, you now have a big decision on whether you want to start them or instead delay them as far off as age 70. Doing so could potentially considerably increase the amount of your monthly payments for the remainder of your lifetime.

Today we look at key considerations regarding Social Security if you were born in 1958.

What is full-retirement age?

When it comes to Social Security, there are myriad terms, dates and acronyms you need to be aware of as you approach or are in retirement.

One of the most important ones is the term full retirement age or FRA. Many people make the mistake of believing their FRA is age 62, when they first become eligible for their Social Security benefits.

While you can begin to draw your Social Security benefits starting at that age, the payment that you will receive will be discounted from your full benefits by 28.33-percent (33.33-percent for your spouse), and would scale back (less discounted) each month thereafter.

In other words, were you to elect to begin receiving your SS benefit starting at age 62 when first eligible, the amount you’d receive would be approximately 71.7-percent of your FRA benefit amount.

Each month you waited past the date first eligible, the percentage discount would scale back until you would receive 100-percent (no discount) in the month you reached your FRA.

And for rest of your life the SS benefit (adjusted for inflation) would remain discounted by the same percentage as when you first elected to start collecting.

The exact benefits you will receive are determined by the Social Security Administration (SSA). You can actually view your benefit amount by checking your account at the SSA.

Born in ’58  – when can you retire with full SS benefits?

As to what your FRA date actually is, it’s based on your age and it’s not the same for everyone. If you were born in 1960 or after, your full retirement age is 67. If born prior to birth year 1970, the exact FRA varies.

Given you were born in 1958, your FRA is age 66 and eight months. So, if you were born in February of 1958, your FRA date would be October of 2024.

You can check out the SSA chart here to see the percentage discount from your FRA starting at age 62 up until you would start to receive your full benefit at age 66 and eight months.

Notice that if you were to start your Social Security at that time, you would receive 100-percent of your benefits and your eligible spouse would receive 50-percent.

What if you prefer to hold off – what is the upside of doing so?

A big consideration for many people is waiting to begin their Social Security benefits until reaching age 70. By doing so you would actually increase the amount you would receive by 0.07-percent each month up until you reached age 70.

Doing so brings the total monthly benefit you would receive starting at age 70 and thereafter to 126.7-percent of your original Social Security benefit.

That’s a pretty significant amount of money paid out each month and guaranteed for your lifetime, so it’s certainly worth consideration.

Spousal benefit

When it comes to an eligible spouse, they can receive up to a maximum of 50-percent of your benefits amount when you reach FRA (a smaller percentage if you start collecting earlier), but that is based on their FRA. If they are less than their own full retirement age, that percentage of benefit they receive is forever reduced.

If you do choose to delay starting your benefits beyond age 66 and 8 monthly, up to age 70 (when your benefit is capped), your spouse remains capped at 50-percent of your FRA benefit amount. They are not eligible for the increased delayed-benefit percentage.

Also, your spouse can choose between their own Social Security benefit or up to 50-percent of your benefit, depending on which is the greater amount. They cannot collect both their own benefit and the spousal benefit.

One last point is the fact that if you die, you spouse can be eligible for survival benefits; up to 50-percent of your FRA benefit.

The earliest they could receive survivor benefits is age 60 (50 if disabled), but they would receive a reduced monthly benefit amount depending on their age, up to their FRA. If they elect to delay until their own FRA, they would be eligible for the full surviving spousal benefit amount.

Why it might not make sense to wait till age 70

As previously detailed, there is a monetary advantage in waiting to start Social Security payments for as long as you can after you reach FRA, up until age 70. At that age you would be entitled to an enhanced benefit of approximately 127-percent of what your FRA Social Security payment would normally be.

For the remainder of your lifetime you would receive larger monthly payments. That said, you would receive fewer monthly payments and for a shorter time period than if you elected to start taking your Social Security earlier.

Some of the reasons for starting Social Security earlier, include:

• If you’re no longer working and need the payment to help pay your monthly bills
• if you’re in poor health
• If your spouse or a surviving member of your household is in poor health
• If you’re family history is not one that favors longevity
• If you’re the lower-earning spouse and your higher-earning spouse can wait to file for a higher benefit

Working and collecting Social Security

As far as the Social Security Administration is concerned, you are retired when you start to collect benefits. When it comes to working and collecting Social Security, you are allowed to do both.

In fact, if you have a higher income during that period, it might factor into your lifetime earnings average, potentially increasing you’re eligible benefits monthly and over the course of your lifetime.

If you do decide to continue working and collect Social Security, there are limits on the amount you can earn and still receive full benefits, according to the Social Security Administration.

The limit on earnings in 2024 is $59,200. The SSA will deduct $1.00 for every 3-dollars you earn above that limit, but they only count your earnings up to the month before you reach your FRA. Thereafter there is no limit on the amount you can earn and still receive full benefits. Born in 1958, this is a relatively insignificant issue at this point.

What about taxes and social security?

Despite what many think, you may be taxed on your Social Security benefits if your “combined income” (single or with spouse) exceeds certain thresholds.

Combined income is considered the combination of your adjusted gross income (AGI) plus non-taxable interest and one/half of your Social Security benefits, according to the SSA..

For 2024 individual filers, you may have to pay income tax on up to 50-percent of your benefits if your combined income is between $25,000 and $34,000. If your combined income is above $34,000, up to 85-percent of your benefits may be taxable.

For a 2024 joint-filer return, you may have to pay income tax on up to 50-percent of your benefits if your combined joint income is between $32,000 and $44,000. If your combined joint income is above $44,000, up to 85-percent of your benefits may be taxable, according to the Social Security Administration.

Keep in mind there are some states that also tax Social Security benefits, so you need to check whether your state is one that does so.

Be sure to do this if you haven’t already

One last issue to be aware of is applying for Medicare if you haven’t already done so. In fact, you should have done so within three months of turning 65, according to the Social Security Administration. Failing to do so can result in higher costs for your Medicare Part B (medical insurance) and Part D (prescription drug) coverages.

Conclusion

Yeah, born in ’58 was pretty cool.

Now it’s ’24. A lot has changed.

Some would say positively and others might say, “Not so much.” The Taylor Swift phenomenon with her legion of “Swifties” is still going strong and seems to be dictating rules to the NFL nowadays. And we have cars that don’t use gas (or need a driver), reality is now virtual and intelligence is now artificial, leopard skin is now the “thing” in fashion, and…oof!

Well, the good news is you made it to this point in time in your life, which at times along the way probably seemed doubtful, truth be told.

But you did it…and now you’re actually living out the future you worked so long and hard to make a reality.

Now it’s “me” time for you and your spouse, when you want to live out your “second act” in life fulfilling your dreams and aspirations.

While you’d probably prefer avoiding having to make lots of decisions going forward, especially given you might have spent a lifetime always having to decide for yourself, your family, groups, employees and even companies, that’s not a reality.

Reality is there are still many things you’re going to have to contemplate and make decisions about, especially when it comes to navigating retirement.

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A big one potentially is what you are going to do about Social Security, now that you’ve reached your FRA (or you are extremely close to doing so).

That is a critical decision that will impact the rest of your life in retirement for you and your spouse. It will quite potentially impact what you are able to leave for your spouse and other loved ones when you pass.

Social Security aside, there are many decisions you’ll face going forward. Retirement can get very complicated and frankly you’d be best served working with a proven team who can help you navigate your golden years.

One that can help ensure your plans and goals are fully considered and incorporated.

At Oak Harvest we can look at your current retirement plan to determine if it can really meet your goals. Or we can assist you with a retirement plan capable of helping you do so. We can build a holistic, comprehensive retirement plan addressing relevant issues, utilizing strategies that cover taxes, income, spending, healthcare, legacy, and more, customized to your family’s specific needs.

A plan created with the goal of ensuring you can successfully live out the retirement you and your spouse envision.

If you are ready to take the next step and talk to a team of retirement planners who can advise on all your retirement needs, and who will put your interests first, Schedule a call today!

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