Full Retirement Age

• Full retirement age for most retirees in 2011 is 66. Individuals born between 1943 and 1954 fall into this category. You may take early retirement as early as 62 or late retirement at any age past 66, but Social Security adds no benefits to your account once you reach age 70. Social Security reports that the overall amounts are approximately the same whether you take a lower amount over a long period or a higher amount over a shorter time. Because Social Security does not provide 100 percent of income needed for retirement living, many retirees work to supplement their benefits.
  
  

Working

• If you work and collect early retirement, Social Security penalties apply until you reach full retirement age. In 2011, you may earn $14,160 before penalties apply for early retirees. Social Security charges $1 for every $2 you make in excess of $14,160 in a calendar year. Once you reach full retirement age, no penalties apply to your earnings, and SSA recalculates your earnings to add months in which penalties applied. You may earn income without penalty and collect your Social Security retirement as well as soon as you reach full retirement age.
  
  

Waiting

• Waiting to collect Social Security until you reach age 70 increases your monthly benefit approximately 30 percent. Social Security calculations are at 100 percent for full retirement age. Early retirement at age 62 works out to about 75 percent of full retirement figures. Retirement at age 70 is about 130 percent of full retirement calculations. You may receive 30 percent more each month by waiting to age 70, but you will have four years or 48 months between 66 and 70 that you did not collect benefits.
  
  

Taxes

• If you work and receive Social Security, the Internal Revenue Service taxes your income, and may tax your Social Security. If you make in excess of $25,000 in combined income as an individual, or $32,000 as a couple, the IRS taxes 50 percent of your Social Security benefits. If that total is greater than $34,000 as an individual or $44,000 as a joint filer, 85 percent of Social Security benefits are taxable. Combined income calculations consider your adjusted gross income plus nontaxable interest and 50 percent of your Social Security benefits. Consider the impact of taxes on your Social Security benefits and your work income when deciding if you should collect Social Security retirement.