A law passed in the 1980s has gradually raised the retirement age at which you can receive your full Social Security benefits, so if you intend to retire soon, make sure you have your calculations correct.
According to the Bipartisan Policy Center, Congress passed a law in 1983 that progressively raised the age at which individuals could collect 100% of their Social Security benefits from 65 to 67.
This shift was seen over the ensuing decades as Americans got closer to retirement age. The raise was intended to keep up with rising life expectancy.
Social Security beneficiaries will have to wait until this retirement age to get 100%
Good news – if you were born on this date you can apply for 100% retirement – it’s official!
The Social Security Administration defines full retirement age as the age at which you are entitled to unreduced Social Security retirement payments. Your birth year determines the month and year you reach full retirement age. By 2025, depending on the month, the 1959 birth cohort will reach the age at which they can begin receiving their full benefits. Because it was the requirement for the majority of Social Security’s history, the Center for Budget and Policy Priorities states that most Americans believe that 65 is the normal age of retirement.
Social Security officials stated the law raised the age starting for anyone born in 1938 or after. The retirement age increased by two months for each year thereafter for anyone born in 1960 or later. For example, if you were born in 1957, you would be eligible to start receiving your full Social Security payments at age 66 years and 6 months. To be eligible for your full benefits, you must be 66 years and 8 months old if you were born in 1958. It is important to note that the current full retirement age is 67 for anybody born in 1960 and after.
Those who receive Social Security benefits may choose to begin receiving them before the full retirement age. You receive a substantial reduction in benefits, about 25 percent at 66 and 30 percent at 67. However, keep in mind that once you reach 62 years you can start receiving benefits. A larger monthly payment will be yours if you wait until you reach 70 to begin receiving benefits. Use the Social Security online calculator to see when you can get your full retirement benefits or how much you can receive if you retire early.
How will the new retirement age impact beneficiaries who claim benefits at 62?
American beneficiaries can usually apply for their benefits as early as 62 years, but they will receive a lower benefit that will be fixed for the duration of their retirement, but people can start making claims as soon as they turn 62. Many older Americans decide to make the sacrifice of claiming at age 62, which will result in a benefit that is about 30% less than their full benefit, because they believe it makes more sense to claim more years of guaranteed retirement income, even if the amount is lower, or because they are compelled to retire sooner than they had intended.
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Although the retirement age rise is not new, some older workers may be caught off guard because it would still diminish benefits even if you claim a month before your FRA, albeit at a slower rate than when you are 62.
Additionally, there can be a substantial financial difference between waiting until FRA and claiming at age 62. According to the Social Security Administration, a person who retires at FRA in 2024 may earn a maximum monthly payment of $3,822, whereas a person who claims at age 62 would only receive a maximum of $2,710.