Retirement and Social Security Benefits: How It Works After You Retire

By: Disability Group, Inc.

Retirement means no more alarm clock, no more commute, and no more stress. Doesn’t that sound great? A secure and comfortable retirement is a worker’s dream. But not doing the proper planning can make that dream into a nightmare. Here are some factors to take into consideration when planning for your retirement.

At what age am I eligible for retirement benefits?

In order to receive full benefits a worker must retire at the “Full Retirement Age.”  Over time the average life expectancy has gradually increased and therefore the full retirement age also increases.  Generally, workers born before 1938 can retire at age 65 and workers born after 1960 can retire at age 67.  If you were born between 1938 and 1960 you can go to to find out your Full Retirement Age based on your birth date.

A worker may retire before or after Full Retirement Age with certain caveats. The earliest anyone can retire is at 62 years old.  However, retiring before the “Full Retirement Age” means your monthly benefits will be reduced according to a mathematical formula. For example, assuming a full retirement age of 67 years old, a worker that retires at 62 will receive only 70% of their normal benefit. On the other hand, a worker that delays retiring past Full Retirement Age will increase their monthly benefit.

How will my monthly benefits be calculated?

Social security will average the 35 years of employment during which a worker earned the most. This number will then be entered into a complex formula that adjusts for various factors such as inflation. The formula will increase the monthly benefit of a worker who has a spouse or dependent children.

You can get an estimate of your retirement benefits by using the social security retirement estimator (

What if I receive a Pension or have a 401K?

A pension or 401k plan will generally not effect the value of your monthly benefit. However, most 401k’s do have penalties if a worker decides to retire before Full Retirement Age. Ask your employer to see how this works.

What about Healthcare?

Lack of healthcare is one of the main reasons workers do not retire early. Medicare is available if a worker meets the criteria for eligibility. To be eligible, a worker must be at least 65 years old and be a legal resident for at least 5 continuous years. Medicare is also available to residents that are receiving social security disability benefits.