A regulation passed in the 1980s gradually raised the age at which you can collect full Social Security payments, so if you plan to retire soon, double-check your figures.
According to the Bipartisan Policy Center, Congress passed legislation in 1983 to gradually raise the age at which people might receive 100% of their Social Security benefits from 65 to 67.
This transition occurred over the following decades, as Americans approached retirement age. The hike was meant to keep pace with rising life expectancy.
Social Security beneficiaries will have to wait until this retirement age to get 100%
The Social Security Administration defines full retirement age as the age at which you are eligible for unreduced Social Security retirement benefits. Your birth year influences the month and year when you reach full retirement age.
By 2025, depending on the month, the 1959 birth cohort will be old enough to begin receiving full benefits. According to the Center for Budget and Policy Priorities, most Americans assume that 65 is the standard retirement age because it has been the case for the bulk of Social Security’s existence.
According to Social Security officials, the statute raised the age beginning with everyone born in 1938 or later. Anyone born in 1960 or later has a two-month increase in retirement age every year.
For example, if you were born in 1957, you would be able to begin receiving full Social Security benefits at the age of 66 years and six months. To be eligible for full benefits, you must be 66 years and 8 months old if you were born in 1958. It is worth noting that anyone born in 1960 or later has a full retirement age of 67.
Those who receive Social Security benefits may opt to begin collecting them before reaching the full retirement age. You receive a significant drop in benefits, approximately 25% at 66 and 30% at 67.
However, after you reach the age of 62, you will be eligible to receive benefits. If you wait until you’re 70 to start receiving benefits, you’ll get a higher monthly payment. Use the Social Security online calculator to find out when you can collect your full retirement benefits and 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 typically apply for benefits as early as age 62, although they will receive a smaller payment that will be fixed for the life of their retirement, but persons can begin making claims as soon as they turn 62.
Many older Americans decide to make the sacrifice of claiming at age 62, which results in a benefit that is approximately 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 forced to retire earlier than they had planned.
Although the retirement age increase is not new, some older workers may be taken aback because it will still reduce benefits even if you claim a month before your FRA, albeit at a slower rate than when you are 62.
Furthermore, there may be a significant cost difference between waiting until FRA and claiming at age 62. According to the Social Security Administration, a person who retires at FRA in 2024 can get a maximum monthly payout of $3,822, whereas someone who claims at age 62 can only receive a maximum of $2,710.