Age

• Full retirement age in 2010 is 66 or 67, depending on your birth date. Full retirement age at 65 applies to retirees born in 1942 or before. Full retirement age for retirees born from 1943 to 1954 is age 66. Full retirement age increases by two months for each year from 1954 forward. A person born in 1955 will reach full retirement age at 66 years and two months. A person born in 1960 must be 67 to reach full retirement age.
  
  

Income

• You can collect Social Security at full retirement age and work as much as you choose. Once you reach full retirement age, Social Security regulations do not penalize the retiree for other income. The Internal Revenue Service taxes income and may tax up to 85 percent of your Social Security benefits.
  
  

Taxes

• Full retirement age does not sway the IRS. The IRS taxes Social Security benefits starting at $25,000 in combined income for individual filers. Combined income uses the adjusted gross income from IRS Form 1040 as a base, adds nontaxable interest and 50 percent of Social Security benefits for the year. That combined-income figure determines potential tax liability. The IRS taxes 50 percent of Social Security benefits of individuals with a combined income of $25,000 to $34,000 and 85 percent of Social Security benefits of individuals with a combined income greater than $34,000. Joint filers pay taxes on 50 percent of Social Security starting at $32,000 and up to 85 percent at $44,000 combined income.
  
  

Considerations

• You do not have to collect Social Security benefits at full retirement age. You may choose to wait until age 70 and allow additional benefits to accrue, particularly if you have other income or are working. You get 100 percent of retirement benefits at full retirement age, but you may get 108 percent or 132 percent at a later date, according to Publication 05-10047 on the Social Security website.
  
  

Benefits

• The Social Security Administration emphasizes that choosing when to collect Social Security benefits is a personal choice, but that the totals are approximately the same over a lifetime. You may choose to take early retirement at age 62 and receive 25 percent less than at full retirement, or you may choose to wait until age 70 and receive 32 percent more than at full retirement, based on 2010 figures and retirement at age 66. Early retirement may trigger penalties for income in excess of $14,160, as of 2010, at a rate of $1 for every $2 made over that amount. This is only for early retirement years. The year you turn full retirement age, the penalties are lower, and nonexistent the month you reach full retirement age.