When to start drawing your retirement:
Some people draw it as early as age 62 at a reduced amount, while others opt to wait for, “full retirement age” ie. 65 to begin drawing their retirement benefits. If you draw early at age 62, your monthly benefit is reduced by 30% – 40%. This doesn’t reverse as you get older, you will be drawing a reduced amount forever, so wait if at all possible.
Did you know that each year that you wait to start claiming benefits after “full retirement age” your monthly benefit will continue to increase? Your benefit will increase approximately 8% per year for each year you delay drawing retirement benefits up to age 70. There is no additional benefit for waiting until after age 70 to draw.
Waiting until age 70 to begin drawing retirement as opposed to age 62, could result in approximately 35% higher monthly benefit!
If you work while drawing early retirement, you will be penalized after a certain threshold. ($14,640 in 2012) $.50 out of each dollar earned over this amount is deducted from your benefits for as long as you are working. It reverses only when you stop. Conversely, if you continue to work after full retirement age, there is no reduction at all.