Full Retirement Age for Those Born in 1965
The full retirement age (FRA) is the age at which a person is entitled to 100% of their primary insurance amount (PIA). For many years, the FRA was 65, but in 1983, Congress passed a law to gradually increase the age due to rising life expectancy. For everyone born in 1960 or later, including those born in 1965, the FRA is 67.
This means that if you were born in 1965, you can claim your unreduced benefits by waiting until you reach age 67. For those considering retirement planning, knowing this benchmark is crucial for maximizing your potential payout.
Early Retirement Options and Reductions
While 67 is the age for full benefits, it's possible to start receiving Social Security earlier. The earliest age you can claim benefits is 62. However, choosing to retire early results in a permanent reduction of your monthly benefit amount. The reduction percentage is based on the number of months you receive benefits before your full retirement age.
For those born in 1965, taking benefits at age 62 results in a benefit reduced by about 30%. For each year you claim early, the reduction is permanent. This is a significant factor to consider for those who might need income sooner versus waiting for a larger monthly check.
Here’s how the reduction for early retirement is calculated, based on information from the Social Security Administration:
- Up to 36 months early: Your benefit is reduced by 5/9 of 1% for each month.
- More than 36 months early: Your benefit is further reduced by 5/12 of 1% for each additional month.
Delayed Retirement Credits
On the other end of the spectrum, if you can afford to wait, you can delay claiming your benefits past your full retirement age and earn delayed retirement credits (DRCs). These credits increase your monthly benefit amount for each month you delay claiming, up to age 70.
For those with a full retirement age of 67, the delayed retirement credit results in an 8% increase per year that benefits are delayed. This can significantly boost your monthly income later in life. For example, if you were born in 1965 and wait until age 70 to claim, your monthly benefit will be approximately 24% higher than it would have been at your full retirement age of 67.
How Your Choice Impacts Your Benefits
The decision of when to claim Social Security is a deeply personal one, with pros and cons for each option. Your decision should be based on your individual financial situation, health, and anticipated lifespan.
- Claiming at age 62 (Early Retirement): Best for those who need income immediately, have health issues, or don't expect to live past the average life expectancy. The main downside is a permanently reduced monthly benefit.
- Claiming at age 67 (Full Retirement Age): Provides 100% of your earned benefit. It's a balanced approach for those who can afford to wait and want their full monthly check. You can also work part-time without having your benefits reduced by the earnings limit.
- Claiming at age 70 (Delayed Retirement): Maximizes your monthly payment through delayed retirement credits. This is often the best choice for those in good health with a long family history of longevity and a financial plan that allows them to wait.
Comparison Table: Claiming Age vs. Benefit Amount (Born 1965)
| Claiming Age | Monthly Benefit | Impact | Considerations |
|---|---|---|---|
| Age 62 | Reduced (Approx. 70%) | Permanent reduction in monthly income. | Health issues, need for immediate income, or shorter life expectancy. |
| Age 67 | Full (100%) | Full, unreduced monthly benefit. | Balanced approach, can work without earnings limit penalty. |
| Age 70 | Increased (Approx. 124%) | Significant increase in monthly income. | Good health, strong financial situation, long life expectancy. |
Conclusion
For anyone born in 1965, the full retirement age is 67, but the flexibility of Social Security allows you to choose when to start receiving benefits based on your personal circumstances. Starting at age 62 will provide immediate, though permanently reduced, income. Waiting until age 67 secures your full, unreduced benefit. The most financially rewarding option, for those who can wait, is delaying benefits until age 70 to receive a significantly larger monthly payment for the rest of your life. The optimal strategy for you depends on your financial needs, health status, and other sources of retirement income. It's often beneficial to review your options and projections through the Social Security Administration's online tools or with a financial advisor.
Outbound link: Understanding Your Retirement Benefits from the Social Security Administration*
