What Is Retirement Age in Michigan?
In Michigan, you can begin receiving Social Security retirement benefits as early as age 62. However, to receive full benefits, your Full Retirement Age (FRA) depends on your birth year. For those born in 1960 or later, the FRA is 67. When it comes to retirement accounts like 401(k)s and IRAs, you can usually begin making penalty-free withdrawals at age 59½.
Understanding your retirement age and benefit eligibility is a key step in planning your future. With so many moving parts: Social Security, accounts, applications, and more, getting guidance from a Kalamazoo retirement planning professional can make the difference.
What Is the Full Retirement Age?
When you reach Full Retirement Age (FRA), you can start collecting 100% of your Social Security benefit amount. Here’s a quick breakdown:
- • Born 1943–1954: FRA is 66
- • Born 1955–1959: FRA gradually increases from 66 and 2 months to 66 and 10 months
- • Born 1960 or later: FRA is 67
You may apply for benefits as early as age 62, but your monthly benefit amount will be permanently reduced. If you delay receiving your retirement benefits beyond your FRA, your payments can increase thanks to delayed retirement credits.
Receiving Your Retirement Benefits
To receive benefits, you must submit a retirement application through the Social Security Administration. You can begin the application process online or by visiting your local SSA office. Keep in mind:
- • Early benefits = reduced monthly payments
- • Waiting = increased payments, up to 8% more per year until age 70
- • Your benefit is based on your 35 highest-earning years
Planning when to start taking benefits is essential for maximizing lifetime income and aligning with your financial goals.
Social Security Benefits
Your Social Security benefit is based on your 35 highest-earning years. The more you earn (up to a limit) and the longer you work, the higher your monthly payment will be. While you can receive benefits as early as age 62, this comes with a permanent reduction. For example, claiming at 62 instead of your full retirement age could lower your monthly benefit by up to 30%. On the other hand, delaying benefits past your FRA can increase your payments, earning you up to 8% more per year until age 70. Knowing when to apply can make a big difference in how much money you receive over time.
Social Security’s general benefits also have the chance to increase each year based on the cost of living, as measured by the Consumer Price Index. These increases are called Cost-Of-Living Adjustments, or COLAs. To check what the latest consumer price index measurements are and how they’ve affected social security, you can check the history of COLAs with the office of social security.
Retirement Account and 401k
For accounts like 401(k)s and IRAs, here’s what to know:
- • Age 59½: You can withdraw funds without the 10% early withdrawal penalty
- • Age 55: You may qualify for penalty-free withdrawals under the “Rule of 55” if you’ve left your job
- • Age 73: You must begin Required Minimum Distributions (RMDs) as part of current IRS laws
These accounts can be held at a financial institution and may vary in investment earnings. It’s essential to review account balances, tax strategies, and payout options.
Does Age Affect Survivor Benefits?
Losing family members or a spouse who are wage earners can have a large impact on the well-being of your household, both emotionally and financially. So, benefits for survivors look to soften that impact by helping to provide for those who might inherit what was left by the one who passed on. Both spouses and children may benefit from survivor benefits, but, similar to regular benefits, these also have certain requirements to be met, including age.
Surviving Spouse
When you die, members of your family may be eligible for survivor benefits that are distributed, and that includes surviving spouses. For these individuals, retirement age affects the distribution amount that they are eligible to receive, similar to regular benefits. That breakdown is as follows:
- • The full retirement age for survivors born from 1945 and 1956 is 66.
- • The full retirement age for survivors increases gradually if you were born from 1957 to 1962.
- • For anyone born 1962 or later, full survivors’ benefits are payable at age 67.
Your surviving spouse can get reduced benefits as early as age 60. But, if your surviving spouse has a disability, benefits can begin as early as age 50. Your surviving spouse may also be able to get benefits at any age if they take care of your child if that child is under 16 years of age or has a disability. The child must also be receiving Social Security benefits.
Surviving Divorced Spouse
Depending on some different requirements, you may qualify for Social Security benefits for surviving an ex-spouse as well. As the survivor, you must:
- • Be 60 years of age (50 if you are disabled)
- • Have been married to the ex-spouse for at least 10 years
- • Be unmarried or have remarried after the age of 60 (50 if you are disabled)
- • Have an ex-spouse who was qualified for retirement or disability benefits
There are some other things to keep in mind with survivor benefits from an ex-spouse such as their work history, and those are laid out by the Social Security office.
Whether you’re a surviving spouse or divorced spouse, Wiser Financial Group can help you work through the potential benefits available to you if you are eligible. Our team of financial experts will help you work through the details, help figure out the effective date for when you’re eligible for benefits and your first payment from SS, and any other current laws that might apply to your unique situation.
Questions About Your Retirement Date?
At Wiser Financial Group, we understand that no two retirements look the same. Whether you’re submitting a retirement application or deciding when to start collecting benefits, our Kalamazoo-based advisors can help you retire with confidence. If you need help with your retirement date, account strategy, or Social Security application, contact Wiser Financial Group today to schedule your consultation and take the next step in your retirement planning journey.
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If you’re eager to begin your financial journey, the team at Wiser Financial group is here to help.