No, the full retirement age for Social Security is currently not 70
For many, the question of "Did retirement age change to 70?" arises from the fact that 70 is the age at which an individual can receive the maximum possible Social Security retirement benefit. However, the official Full Retirement Age (FRA) is currently 67 for anyone born in 1960 or later, a figure that has been gradually increasing for decades. This distinction is crucial for retirement planning, as the age you choose to start collecting benefits will have a permanent effect on your monthly payout.
The history of the Social Security retirement age
The gradual increase of the FRA from 65 to 67 was enacted by the Social Security Amendments of 1983. This was a phased-in change designed to reflect longer life expectancies. The transition was implemented over many years, with the full age of 67 applying to all individuals born in 1960 and after. Understanding this historical context helps clarify why the age differs for older versus younger generations and why it has become a point of confusion for many.
Maximize your benefits by delaying until age 70
While the FRA is not 70, delaying the start of your Social Security benefits until age 70 offers a powerful financial incentive. For every year you wait to claim benefits past your FRA, up to age 70, you earn delayed retirement credits that increase your monthly payment. This results in a higher and permanently increased monthly income stream for the rest of your life. For someone with an FRA of 67, waiting until age 70 can increase monthly payments by 24%. However, there is no further increase for delaying benefits past age 70, making it the maximum benefit age.
Important ages for Social Security benefits
Understanding the various Social Security retirement ages is key to making an informed decision. The earliest you can begin receiving benefits is 62, but this comes with a permanently reduced monthly payout. Your FRA, which depends on your year of birth, is when you are eligible for 100% of your earned benefit. The maximum benefit age is 70, when you stop accumulating delayed retirement credits.
| Feature | Early Retirement Age | Full Retirement Age (FRA) | Maximum Benefit Age |
|---|---|---|---|
| Age | 62 | Varies by birth year (67 for those born 1960+) | 70 |
| Benefit Level | Reduced (permanently) | 100% of your Primary Insurance Amount (PIA) | Highest possible monthly benefit |
| Impact | Smaller monthly payment, but starts earlier | Benchmark for receiving full benefit | Largest monthly payment, providing greater income later in life |
| Consideration | Prioritizes receiving income sooner | Crucial for calculating your standard benefit | Prioritizes maximizing lifetime payments |
Factors to consider when deciding to retire
Deciding when to retire is a complex and personal decision that extends beyond just the Social Security full retirement age. Your personal financial situation, health, and career satisfaction all play significant roles in determining your optimal retirement timing.
- Financial readiness: Assessing your savings in 401(k)s, IRAs, and other investment accounts is crucial. Waiting longer to retire allows your investments more time to grow, especially with compounding interest. It also shortens the time your savings must cover, making them last longer.
- Health and well-being: Your physical health is a significant factor. While some studies suggest working longer can lead to better health outcomes, physically demanding jobs or declining health may necessitate an earlier retirement. A 2016 Oregon State University study found working one year past 65 was associated with an 11% lower risk of death, but high-stress jobs and burnout can have negative health effects.
- Lifestyle and personal goals: Consider how you want to spend your retirement years. For some, the freedom of retiring earlier to travel or pursue hobbies outweighs the financial benefits of delaying. For others, the purpose and social connection derived from work are more valuable.
- Healthcare coverage: If you retire before age 65, you will need to arrange for private health insurance to bridge the gap until Medicare eligibility. Waiting longer may allow you to remain on an employer-sponsored plan, potentially saving you thousands in healthcare costs.
- Spousal benefits: For married couples, coordinating retirement with a spouse is an important consideration. Claiming strategies can be coordinated to maximize total household benefits. For instance, the lower-earning spouse might claim benefits earlier while the higher-earning spouse delays until 70.
Conclusion: The choice is yours
While the official retirement age for full Social Security benefits did not change to 70, the age has gradually increased to 67 for those born after 1959. Age 70 remains the age to claim the maximum possible monthly benefit, providing a strong financial incentive to delay. The ultimate decision of when to retire is a personal one, requiring a careful evaluation of your financial readiness, health, personal aspirations, and the trade-offs between receiving benefits sooner versus maximizing their value over time. For more information on your specific benefits, it is recommended to visit the official Social Security Administration website.
Frequently asked questions about retirement age
Question: When is the earliest I can start collecting Social Security benefits? Answer: You can start receiving Social Security retirement benefits as early as age 62. However, this will result in a permanent reduction in your monthly payment.
Question: Is the full retirement age (FRA) the same for everyone? Answer: No, the FRA is determined by your year of birth. It gradually increased from 65 to 67 for those born in 1960 or later, as a result of a 1983 law.
Question: How much more can I get if I delay my benefits until 70? Answer: For each year you delay claiming Social Security benefits beyond your FRA, you earn delayed retirement credits. This can lead to a significant increase in your monthly payment, approximately 8% per year, until you reach age 70.
Question: Should I wait until age 70 to start collecting my benefits? Answer: The decision depends on your individual circumstances. Waiting until 70 maximizes your monthly benefit, which can be advantageous if you have a long life expectancy or a sufficient nest egg to live on in the interim. However, retiring earlier may be preferable if your health is declining or if you prioritize enjoying retirement sooner.
Question: What is the difference between full retirement age and maximum benefit age? Answer: The full retirement age (FRA) is the age at which you can collect 100% of your Social Security benefit. The maximum benefit age is 70, which is the latest you can delay claiming benefits to increase your monthly payment.
Question: Will delaying retirement until 70 shorten my retirement years too much? Answer: While delaying retirement until 70 shortens the total number of years you will be retired, it also means your savings need to last for a shorter period, potentially providing a more secure financial foundation for your later years. For many, the increased monthly Social Security payment offers greater peace of mind.
Question: What happens if I continue to work after claiming Social Security benefits? Answer: If you continue to work while collecting benefits before your full retirement age, your benefits may be temporarily reduced if you earn over a certain limit. However, once you reach your FRA, there is no earnings limit, and your benefits will not be reduced.
