Bill’s benefits would be reduced by 5/9 percent per month for 36 months prior to age 67 (20 percent for three years) and 5/12 percent for each month after those 3 years (5 percent per year for each year after that).

a. Calculate the benefit Bill would receive if he were to retire at age 62:

5/9 percent x 36 months = 20%

5/12 percent x 24 months = 10%

Total reduction in payments = 30%

b. Bill would receive 1,300 * .7, or $910 each month.

 

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