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Reduction of Benefit Rate

Excerpted from "Social Security Handbook". See the up-to-date, official Social Security Handbook at ssa.gov.

0723

723. Reduction of Benefit Rate

723.1 When are benefit rates reduced?

Your benefit rate is reduced if you become entitled to the following benefits at the ages shown:

  1. Retirement insurance benefits at age 62 through the month before you reach Full Retirement Age (FRA);

  2. Husband's or wife's insurance benefits at age 62 through the month before you reach FRA, provided that you do not have in care a child of the worker either under age 18 or disabled and entitled to benefits;

  3. Widow(er)'s insurance benefits beginning at any time from age 50 through the month before you reach FRA;

  4. Widow(er)'s insurance benefits after the deceased worker has received a retirement insurance benefit reduced for age;

  5. Disability insurance benefits received after a reduced retirement insurance benefit; or

  6. Retirement or disability insurance benefits received after a reduced widow(er)'s insurance benefit. This applies only to workers born before 1928.

723.2 How is a reduction in benefits made?

The reduction is made by first determining your full benefit. This benefit rate is then reduced by a specified percentage for each month you are entitled before your FRA. The reduced rate is payable as of the first month of your entitlement to benefits. For retirement and spouse's benefits, you must be at least age 62 throughout the month before entitlement to reduced benefits begins.

These reduced benefits continue at a reduced rate even after FRA. The reduced disability insurance benefit is converted at FRA to a reduced retirement insurance benefit.

723.3 When is the reduced benefit rate recomputed?

The reduced benefit rate may be recomputed to include additional earnings. An increase in your benefits, either resulting from additional earnings or from a cost-of-living increase, is reduced in proportion to the reduction in effect in the first month your benefits were elected. A benefit rate may also be increased to give you credit for certain months before FRA in which the reduced benefit was not paid. (See §728.)

723.4 How will an increase in the retirement age affect reduced benefits?

Beginning with the year 2000 (workers and spouses born 1938 or later, widow(er)s born 1940 or later), the retirement age increases gradually from age 65 until it reaches age 67 in the year 2022. This increase affects the amount of the reduction for persons who begin receiving reduced benefits.

An additional reduction applies to primary insurance benefits and spouse's benefits based on the additional reduction period. The modification for widow(er)'s benefits is slightly different. The reduction amount at age 60 remains at 28 1/2 percent of the full benefit even as retirement age increases.

723.5 What is the full retirement age for workers and spouses born after 1937?

The following chart contains the full retirement age for workers and spouses born after 1937:


Full Retirement Age

If your birth date is...

Then your full retirement age is...

1/2/38-1/1/39

65 years and 2 months

1/2/39-1/1/40

65 years and 4 months

1/2/40-1/1/41

65 years and 6 months

1/2/41-1/1/42

65 years and 8 months

1/2/42-1/1/43

65 years and 10 months

1/2/43-1/1/55

66 years

1/2/55-1/1/56

66 years and 2 months

1/2/56-1/1/57

66 years and 4 months

1/2/57-1/1/58

66 years and 6 months

1/2/58-1/1/59

66 years and 8 months

1/2/59-1/1/60

66 years and 10 months

1/2/60 and later

67 years

723.6 What is the full retirement age for widow(er)s born after 1939?

The following chart contains the full retirement age for widow(er)s born after 1939:


Full Retirement Age

If your birth date is...

Then your full retirement age is...

1/2/40-1/1/41

65 years and 2 months

1/2/41-1/1/42

65 years and 4 months

1/2/42-1/1/43

65 years and 6 months

1/2/43-1/1/44

65 years and 8 months

1/2/44-1/1/45

65 years and 10 months

1/2/45-1/1/57

66 years

1/2/57-1/1/58

66 years and 2 months

1/2/58-1/1/59

66 years and 4 months

1/2/59-1/1/60

66 years and 6 months

1/2/60-1/1/61

66 years and 8 months

1/2/61-1/1/62

66 years and 10 months

1/2/62 and later

67 years

Last Revised: Sep. 22, 2003


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Good Article on Social Security Benefits for Divorced People

This is a good article which outlines Social Security benefits for divorced people. The article refers to "divorced women", but it also applies to divorced men (especially if the woman had higher earnings).

Excerpt :

The law says a divorced woman, who was married to her ex-husband for a minimum of 10 years, is due essentially the same benefits as a woman who is currently married to her husband.

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