Question

Which of the following statements concerning the Social Security system is (are) correct?

I. Workers entitled to retirement benefits can currently take early retirement benefits as early as age 59½.
II. The worker who takes early retirement benefits will receive a reduced benefit because he or she will receive more monthly benefit payments, as payments commence earlier than if the worker had waited and retired at full retirement age.

Answer 1

Workers can retire early at age 62, not 59½, and early retirement results in reduced benefits. Social Security offers financial support to workers after retirement; the full retirement age is 67 for those born after 1959.

Step-by-step explanation:

Regarding the Social Security system, it is incorrect to say that workers can currently take early retirement benefits as early as age 59½; the correct age for early retirement benefits is 62.

However, statement II is correct in that a worker who takes early retirement benefits will receive a reduced benefit due to the extended period over which payments are made, commencing before full retirement age.

The program provides retirement benefits to workers after completing a minimum number of years of work, and these benefits can be claimed upon reaching retirement age.

The full retirement age was originally set at sixty-five but has been increased in legislative changes. For workers born after 1959, the full retirement age is sixty-seven.

Social Security acts as a safety net and has been instrumental in decreasing the rate of elderly poverty.

It is important to note that the system is designed to provide a percentage of a worker's lifetime earnings, with lower-income earners receiving a higher percentage relative to their earnings.