What is Full Retirement Age

what-is-full-retirement-age
If you’re planning to retirement now or in the future, you’ve probably asked questions about Social Security full retirement age (FRA). Your FRA depends on your birth year. Many experts believe FRA will continue to increase gradually over time.

If you were born in 1954 or before, your Social Security FRA is currently 66 years of age. The FRA increases for those born after 1954:

  • If you were born in 1955, your FRA is 66 years and 2 months
  • If you were born in 1956, your FRA is 66 years and 4 months
  • If you were born in 1957, your FRA is 66 years and 6 months
  • If you were born in 1958, your FRA is 66 years and 8 months
  • If you were born in 1959, your FRA is 66 years and 10 months
  • If you were born in 1960, your FRA is 67 years

In order to receive your full retirement benefits from Social Security, it’s essential to wait until your FRA. If you request benefits before that time, you’ll receive less.

Full Retirement Age Impact

Your FRA is the age at which Social Security provides your full retirement benefit as determined by Social Security’s formula. Although you can still request retirement benefits before your FRA, as early as age 62, you’ll receive more money by waiting. If you wait past FRA to age 70, you’ll receive more retirement benefits from Social Security. Otherwise:

  • Requesting your Social Security retirement benefits before FRA means your monthly benefit will be lowed about 6.67 percent a year, or about 0.59 percent a month (less than three years early).
  • If you request retirement benefits more than three years before your FRA, the retirement benefit is reduced about 5 percent a year.

Waiting past your FRA can increase your retirement benefit by about 8 percent a year, or approximately 0.67 percent each month.

Most people don’t request benefits precisely at their start of full retirement age. However, making sure you’ve reached the Social Security FRA before claiming benefits is important. Asking for your Social Security retirement benefits early means you’re not getting the most from your benefits. If you’re married, your FRAs will probably occur at different times.

Let’s say you and your spouse want to request retirement benefits at age 62. You were born in 1956, and your FRA is 66 years and 4 months. Your spouse was born in 1960, so the FRA is a bit longer at 67 years:

  • If you request Social Security benefits at age 62, you’ll claim them 4-1/3 years before FRA. Your benefits will be reduced by a stunning 26.67 percent.
  • Your spouse’s decision to claim benefits at 62 will do so about five full years before FRA. The reduction is about 30 percent in that case!

Future Full Retirement Age

It’s possible that current FRAs could increase in the future. People would need to work longer in order to request their Social Security retirement benefits in that case.

Today’s politicians say that tax increases or lower retirement benefits might be necessary to save the Social Security program. Asking people to work longer is one of the ways to cut retirement benefits. However:

  • Asking people to work longer won’t fully close the funding gap. For instance, raising FRA to 68 for those born in 1960 would cover only 16 percent of the existing funding problem. Raising FRA to 70 would solve just 25 percent.
  • According to the Wall Street Journal, a Social Security tax increase of 100 basis points would cover more than half of the funding gap now.
  • Regardless of future FRA changes, making the personal decision to work longer is probably a good financial decision for most people. You’ll earn more credits and increase retirement benefits on your Social Security earnings credits and work history.
  • If you work longer, up to age 70, it’s also possible to save more money for retirement. Put as much money away for your retirement years because, according to the National Institutes of Health, Americans are living longer.