Introduction

The legislation that Congress passed in 1983 gradually raises the age at which a person can begin receiving their full Social Security retirement benefits. Typically, one could start collecting early retirement benefits at age 62, with a permanent reduction to 80% of the full benefit amount until the full retirement age was reached at age 65. The full retirement age starts at 66 years and two months for those born in 1955 and increases to 67 years and two months for those born in 1960 or later. The option of retiring early at age 62 will remain open but at a lower payout. When the full retirement age reaches 67, benefits received at age 62 will be reduced to 70% of the full benefit, and benefits received at age 65 will be reduced to 86.7 %.

To some extent, you can increase your savings by waiting to retire. Benefits for a person who reaches full retirement age in 2017 (66 years and two months) and waits until age 70 to receive them increase by 8% per year until they reach 132% of what they would have been at the normal retirement age. (Benefits claimed at age 70 will be 24 percent higher because of that delay when the full benefit age reaches 67.) If you wait until you're 70 to start collecting your retirement benefits, you'll get a monthly payment of $3,538 in 2017.

How Does Full Retirement Age Affect Your Social Security Benefits?

If you apply for Social Security when you reach full retirement age, you will receive the maximum monthly payment. Early filing penalties reduce your benefit by the following percentages if you submit your claim before Full Retirement Age:

• Five-ninths of one percent for the first thirty-six months
• One-twelfth of one percent for each month leading up to FRA

This equates to an annual discount of 6.7% for the first three years and an additional 5% for each year after that until FRA. If your FRA is 67 and you start receiving benefits at 62, your payments will be cut in half.

What Age Should You Start to Receive Benefits?

Your monthly retirement benefit will depend on when you start receiving them. In deciding when to begin receiving benefits, there are three age-related considerations to keep in mind.

Full Retirement Age

You are eligible to receive your full retirement benefit once you reach your full retirement age. If you were born between 1943 and 1954, you could retire at the full age of 66. If you were born between 1955 and 1960, your full retirement age would rise to 67 over a few years. The full retirement age for those born in 1960 or later is 67. Your full retirement age can be found on the full retirement age chart based on your birth year.

Early Retirement Age

The Social Security Administration allows retirees to begin receiving benefits at age 62. However, if you begin receiving benefits before your full retirement age, we will reduce them. Please visit our website to see how an early retirement claim will affect your benefit.

Increasing the Retirement Age

As the pension eligibility age is a major factor in a pension plan's solvency, Congress may consider adjusting it to help restore Social Security's solvency. As the NRA is set to rise shortly under current law, this could be a viable option. Congress could phase the NRA change over 12 years rather than 23 for workers turning 62 between 2000 and 2022. If this holds, then in 2011, all workers who turn 62 will be subject to the new, higher NRA.

What Is the Full Retirement Age (FRA)?

When you reach your full retirement age (FRA), you can begin receiving your full Social Security retirement benefits regardless of your birth year. In 1955, the FRA was 66 and 2 months; by 1960, it had risen to 67.

A Bigger Reduction If You Claim Social Security Early

Social Security benefits can begin as early as age 62 for qualified workers, regardless of when they reach full retirement age. In contrast, persons with a later retirement age face a greater benefit reduction if they file for benefits before they are eligible. If you start early, you get less, but you can earn more if you wait. You'll increase your monthly benefit if you can hold off collecting Social Security until you're 70.

Conclusion

Ten years of labor, or 40 credits, are required for Social Security eligibility. The maximum monthly payout for a person who reaches FRA is $3,345. In 2022, a single person's highest monthly benefit is $4,194. This is available only to those who have been high earners for at least 35 years, have waited until 70 to begin collecting benefits, and have earned substantial money throughout their working lives.