Your Official Full Retirement Age
For many years, the standard full retirement age (FRA) for Social Security was 65. However, in 1983, Congress enacted legislation to gradually raise this age to reflect increasing life expectancies. This change was phased in over several decades, and the specific FRA for each person depends on their year of birth. If you were born in 1960 or later, your full retirement age is 67. The age is between 66 and 67 for those born between 1943 and 1959.
Why the age increase?
The gradual increase in the full retirement age was a direct response to demographic shifts. As people began living longer, they also spent a greater portion of their lives in retirement. Raising the FRA was designed to help ensure the long-term solvency of the Social Security program by adjusting benefits to align with these longer life spans.
Early vs. Full vs. Delayed Retirement
Understanding the options for claiming Social Security benefits is crucial for making an informed decision about your financial future. The choice of when to begin receiving benefits can have a significant and permanent impact on your monthly payout.
Early retirement (Age 62)
You can begin receiving Social Security retirement benefits as early as age 62. However, if you claim benefits before your full retirement age, your monthly payment will be permanently reduced. For those with a full retirement age of 67, claiming benefits at age 62 results in a permanent reduction of about 30%. For every month you claim before your FRA, your benefit is reduced, so the earlier you start, the larger the reduction will be. This means a lower monthly check for the rest of your life.
Delayed retirement (Up to age 70)
Conversely, if you choose to delay claiming your Social Security benefits past your full retirement age, you can earn delayed retirement credits. These credits result in a higher monthly benefit for every month you wait, up until age 70. For each full year you delay past your FRA, your benefit increases by 8%. For a person with an FRA of 67, waiting until age 70 can result in a monthly benefit that is 24% higher than their full benefit amount. After age 70, no additional credits are earned, so there is no financial advantage to delaying further.
Comparing Your Retirement Age Options
To help illustrate the impact of your claiming decision, the following table compares the benefit percentage you would receive based on your birth year and claiming age.
| Feature | Early Retirement (Age 62) | Full Retirement (Age 67) | Delayed Retirement (Age 70) |
|---|---|---|---|
| Monthly Benefit | Permanently reduced by up to 30% | 100% of your primary insurance amount (PIA) | 124% of your PIA |
| Duration of Payments | Start earlier, but smaller checks | Start at FRA, with full checks | Start later, but larger checks |
| Lifetime Benefit | Can be higher if you have a shorter life expectancy | Actuarially equivalent to other options based on average life expectancy | Can be significantly higher over a longer life span |
| Financial Considerations | May be necessary due to health or finances | Represents the baseline for your earnings | Provides a substantial boost, often acting as longevity insurance |
| Spousal Benefits | May affect spousal benefits depending on the situation | Provides the full basis for spousal benefits | No further increase after age 70 |
Making the Right Choice for Your Situation
Deciding when to claim Social Security is a highly personal decision with financial, health, and lifestyle implications. There is no single "best" age for everyone. Consider the following factors:
- Your Financial Needs: Assess your savings, investments, and other sources of income. Can you afford to live comfortably on a reduced benefit, or would the higher payments from delaying make a significant difference to your financial security?
- Your Health and Longevity: If you anticipate a longer life expectancy, delaying your benefits to age 70 could result in a much higher cumulative payout over your lifetime. Conversely, if you have health issues, taking benefits earlier may be the more practical choice.
- Your Retirement Lifestyle: Do you want to retire early to travel and pursue hobbies? Or do you enjoy working and want to stay engaged in your career longer? Your desired lifestyle can help guide your decision.
- Marital Status and Spousal Benefits: If you have a spouse, your claiming decision can affect their benefits. It's wise to consider the impact on your household's total benefit, not just your own.
For more detailed information and to use their official calculator, visit the Social Security Administration's website SSA Retirement Planner.
Conclusion
While the answer to is the full retirement age 67 or 70? can be summarized simply by referencing birth years, the reality is far more nuanced. For most people retiring now, the official FRA is 67, but delaying until 70 offers a significant monthly increase. By carefully considering your personal circumstances and financial goals, you can make the optimal decision for your retirement, ensuring your financial security throughout your senior years.
