Understanding the Full Retirement Age (FRA)
Your Social Security Full Retirement Age is the age at which you are entitled to receive 100% of your primary insurance amount (PIA), which is calculated based on your highest 35 years of indexed earnings. Contrary to popular belief, there is no single FRA for all Americans. The age was gradually raised by Congress starting with people born in 1938 and later, culminating in the current standard for those born in 1960 or after.
Birth Year Determines Your Specific FRA
To find your precise Full Retirement Age, you must know your birth year. The gradual increase from age 65 to 67 is based on a sliding scale. This is a critical detail for anyone planning their retirement income, as claiming too early or too late can have a permanent effect on your monthly benefit amount. The table below provides a clear breakdown of the FRA based on your birth year, clarifying the difference between retiring at 67 and waiting longer.
- Born in 1943-1954: FRA is 66.
- Born in 1955: FRA is 66 and 2 months.
- Born in 1956: FRA is 66 and 4 months.
- Born in 1957: FRA is 66 and 6 months.
- Born in 1958: FRA is 66 and 8 months.
- Born in 1959: FRA is 66 and 10 months.
- Born in 1960 or later: FRA is 67.
The Difference Between Claiming at 62, 67, and 70
Your choice of when to start collecting Social Security benefits is a personal and financial one, as it directly impacts the amount you receive each month for the rest of your life. The options range from claiming as early as 62 to delaying until 70.
Claiming Early at 62
You are eligible to start receiving Social Security benefits at age 62, but doing so will result in a permanently reduced monthly benefit. For those with an FRA of 67, claiming at 62 results in a reduction of up to 30%. This may be a necessary choice for some due to health issues or other circumstances, but it's important to understand the long-term financial implications.
Claiming at Full Retirement Age (e.g., 67)
If you wait until your determined FRA, you will receive 100% of your calculated monthly benefit. For many, this is the ideal middle ground, allowing them to receive their full benefit without waiting until age 70. At this age, you can also continue working without your earnings affecting your benefit amount.
Delaying Benefits Until 70
For each year you delay claiming Social Security past your FRA, your monthly benefit increases due to delayed retirement credits (DRCs). These credits stop accumulating at age 70, making it the maximum age to wait for the highest possible monthly payout. For someone with an FRA of 67, waiting until age 70 can increase their monthly benefit by 24%. This can be a powerful strategy for those who are healthy and can afford to wait, as it provides a higher, permanent income stream in retirement.
Comparison Table: Claiming Age and Your Benefits
| Feature | Claiming at 62 | Claiming at Full Retirement Age (e.g., 67) | Claiming at 70 |
|---|---|---|---|
| Benefit Amount | Permanently reduced (up to 30% for FRA of 67) | 100% of your Primary Insurance Amount (PIA) | Maximum monthly benefit (e.g., 124% of PIA for FRA of 67) |
| Benefit Duration | Longer (starts earlier) | Moderate | Shorter (starts later) |
| Impact of Work | Earnings may reduce benefits until FRA. | Earnings have no impact on benefits. | Earnings have no impact on benefits. |
| Key Consideration | Need for immediate income or poor health. | Receive full benefit without extended delay. | Desire to maximize monthly income and have good health. |
How Your Social Security Benefit is Calculated
To calculate your benefit, the SSA first determines your Average Indexed Monthly Earnings (AIME). This involves taking your highest 35 years of inflation-adjusted earnings. Missing years are counted as zeroes. The AIME is then used to determine your Primary Insurance Amount (PIA), which is the benefit you receive at your Full Retirement Age. The PIA is adjusted based on when you choose to start collecting benefits.
Healthy Aging and Your Retirement Decision
When and how to claim Social Security is a crucial part of a larger healthy aging and retirement strategy. Your health, longevity, and overall financial picture are all interconnected. For example, a person with a family history of longevity and a robust savings portfolio may choose to delay claiming until 70 to maximize their income for their long retirement years. Conversely, someone with chronic health issues might opt to take benefits earlier to ensure they have income when they need it most. Consulting with a financial advisor can help you assess your unique situation.
Key Considerations for Your Decision
- Health and Longevity: Your personal and family health history can influence your expected lifespan and should be a factor in your decision. Will you have a long retirement to enjoy the higher payouts, or is it better to take a lower amount sooner?
- Other Retirement Income: Consider your total financial picture. If you have other sources of income, like a pension, 401(k), or other investments, you may have more flexibility to delay claiming Social Security.
- Spousal and Survivor Benefits: If married, your claiming decision can also impact your spouse. Spousal and survivor benefits are affected by the timing of your claim. For more information, you can find a comprehensive guide on the Social Security Administration's website [Social Security Benefits].
- Employment Status: If you plan to continue working past age 62, your earnings may reduce your Social Security benefit until you reach your FRA. This is another reason to carefully consider the timing of your claim.
Conclusion
While the answer to is full retirement age 67 or 70? is often a simple one based on your date of birth, the decision of when to claim benefits is a complex one. There is no one-size-fits-all solution, and the optimal strategy depends on your individual health, financial situation, and personal priorities for your senior years. By understanding how the timing of your claim affects your monthly payout, you can make an informed choice that supports a secure and healthy retirement.
