Is 67 the new 65?
For many Americans, 67 is now considered the full retirement age (FRA) for Social Security benefits. This age, where you can receive 100% of your earned benefits, has gradually increased from 65 due to factors like increased life expectancy. While 67 is the FRA for those born in 1960 or later, the specific age varies based on your birth year.
Your Full Retirement Age by Year of Birth
Use the table below to find your specific full retirement age based on your year of birth:
| Year of Birth | Full Retirement Age (FRA) |
|---|---|
| 1943–1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 or later | 67 |
Claiming Social Security: Early, Full, or Delayed?
Deciding when to start receiving your Social Security benefits is a critical retirement decision. You have three main options: claiming early at age 62, waiting until your full retirement age, or delaying until age 70. Each choice significantly impacts the amount you receive.
Claiming at Age 62: The Early Option
Starting benefits at 62 provides income sooner but results in a permanently reduced monthly payment. For those with an FRA of 67, claiming at 62 means receiving only 70% of your full benefit. This option might be considered due to health issues or job loss.
Claiming at Full Retirement Age (67): The Standard Option
Claiming at your FRA of 67 ensures you receive 100% of your earned benefits based on your work history. If you continue working at this age, your benefits are not subject to the annual earnings limit.
Claiming at Age 70: The Delayed Option
Delaying benefits past your FRA can significantly increase your monthly payments. For each year you wait past your FRA up to age 70, you earn delayed retirement credits, increasing your benefit by 8% per year. This can result in receiving 124% of your full benefit at age 70 for someone with an FRA of 67.
Factors Influencing Your Retirement Age Decision
Several personal and financial factors play a role in determining your optimal retirement age:
- Health and Life Expectancy: Your health status impacts how long you may rely on benefits and whether claiming earlier or later is more advantageous.
- Financial Resources: The amount of savings, investments, or other retirement income you have will affect your need to claim Social Security benefits early.
- Marital Status and Spousal Benefits: Your claiming decision can impact your spouse's potential benefits, including survivor benefits.
- Continued Employment: If you plan to work past your FRA, there's no earnings limit affecting your benefits. However, claiming early while still working can lead to temporary benefit reductions if you earn above a certain limit.
Understanding the Break-Even Point
The break-even point is the age at which the total amount received from delaying benefits surpasses the total amount received by claiming earlier. This calculation helps evaluate whether waiting for higher monthly payments is financially beneficial based on your expected lifespan.
The Significance of Age 67 and Planning for the Future
The shift of the full retirement age to 67 for those born in 1960 or later is a reflection of changing demographics and increased life expectancy. While 67 is the benchmark for full benefits, it is not a mandatory retirement age. The Social Security system offers flexibility to choose when to claim based on individual needs and circumstances. Careful planning and understanding the implications of early, full, or delayed claiming are essential for a secure retirement.
For personalized information and planning tools, visit the official Social Security Administration website [https://www.ssa.gov/retirement/plan-for-retirement].
