To recap key retirement policy changes, increases to the full retirement age at Social Security will now be 67 for all employees born in 1960 or later. This completes a post-1983 policy change that has gradually increased the full retirement age for Social Security recipients to the current 67. Prior to 1983, the full retirement age was 65-66, depending on the birth year. The move to 67 is a response to increases in life expectancy, retirement benefit claims, and economic pressures on the Social Security trust fund. Millions of Americans who are trying to retire should be sure they understand the benefit changes which will now be payable at a later age.
Full Retirement Age by Birth Year
| Birth Year | Full Retirement Age (FRA) |
|---|---|
| 1957 | 66 years, 6 months |
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960+ | 67 years |
Why the Retirement Age is Raised
Having a retirement age of 65 was reasonable when Social Security started, considering life expectancy at the time was 61. Other 20th-century advancements and policy changes dramatically improved the age when people started to retire. The ratio of retirees to workers has also changed significantly. Moving full retirement to 67 helps to diminish claims and promote the sustainability of Social Security.
Changes to Benefits and Retirement Planning
In retirement, important choices must be made now that the required age for receiving full benefits is 67. Benefits can be claimed as early as 62, but doing so will result in a permanent loss of about 30% of monthly benefits, as compared to waiting until full retirement age. On the other hand, payments can be increased once retirement benefits are delayed past full retirement age but only up to 70, so the retiree must consider their health and financial situation to make a choice that balances their retirement goals. Retirement income planning is critical now that lifetime Social Security income will be impacted negatively for those who claim benefits too early.
Implications for Future Retirees
Individuals born in 1959 will reach full retirement age of 66 years and 10 months in 2025, while anyone born in 1960 or after will have to wait until age 67. This is the last phase of the 40-year schedule and the new retirement age will remain for the foreseeable future, until new laws are made to tackle the demographic and fiscal issues. Retirees and future retirees alike will need to maintain appropriate levels of their Social Security benefits so they can make informed retirement planning and claiming decisions.
FAQs
Q: Can I still claim Social Security before 67?
A: Yes. If you claim at 62, however, benefits will be permanently reduced compared to claiming at FRA.
Q: What if I delay claiming past 67?
A: Benefits increase up to 70 because of delayed retirement credits, which increases monthly payments.
Q: Why was the retirement age increased?
A: The increase was partially because of the rising life expectancy and financial pressure on the Social Security system.
With the new age in Social Security systems , America has to rethink their retirement plans for retirement benefits claiming in a new economically and longevity balanced world.
