EveryBody's Guide to the Law

❉ military discharge papers if you had military service;
❉ W-2 form from the previous year, or your last year’s tax return if you are selfemployed.
Amount of Your Retirement Benefits
When you retire at your full retirement age (see Table 16.1), you are entitled to full retirement
benefits (assuming you have earned enough credits to qualify). In calculating your benefits,
Social Security will take an average of your thirty-five highest earnings years. If you
have less than thirty-five years of earnings, Social Security will average in years of zero earnings
to bring the total number of years to thirty-five. Thus, the amount of your monthly
Social Security check will depend on how much, on the average, you made each year for your
thirty-five years of highest earnings; the more you made, the higher your benefits will be (up
to the maximum). You can retire as early as your sixty-second birthday, but if you do, your
monthly checks will be reduced permanently to 80 percent of the full benefit. For example,
the maximum monthly retirement benefit check for a worker who retired in 2001 was $1,536,
but only $1,314 if he or she retired at 62—a monthly difference of $222. For the worker who
retired in 2001 at the full retirement age of 65, it will take twelve years to make up the difference.
If you retire at age 62, for instance, and receive $1,314 a month, by the time you
reach 65, you already will have collected $47,304 in retirement benefits. If you retired at age
65 (or later full retirement age), it would take 17.75 years for your checks ($222 larger per
month) to make up this difference.
If you retire before your sixty-fifth birthday (or later full retirement age, if applicable), the
amount by which your monthly check is reduced depends upon how many months short of
your full retirement age you retire. If you retire at age 62, you will receive a smaller check than
if you retired at 64. By the same token, if you decide not to retire when you reach 65 (or later
full retirement age, if applicable), your benefits will increase for each month that you continue
working. Your monthly checks will increase automatically each year as the national cost of living
goes up. Under the current regulations, if the cost of living increases by, say, 3 percent,
your benefits will rise by the same amount.
Table 16.1 shows the increasing full retirement ages for people born in 1937 compared to
those born in 1960 or later. Note that the full retirement age for purposes of collecting full
Social Security benefits starts at age 65 for persons born before 1938 and rises to 67 years for
persons born after 1959.
Social Security, Medicare, SSI, and Medicaid 373