Your Full Retirement Age: The Rule for Those Born 1960 and Later
For anyone born in 1960 or later, including those with a birth year of 1970, the full retirement age (FRA) is 67. This age is when you are eligible to receive 100% of your primary insurance amount (PIA), which is the monthly benefit you have earned based on your inflation-adjusted average lifetime earnings. The increase in FRA over several decades was a legislative change aimed at adjusting for increased life expectancies.
The Impact of Claiming Early vs. Delaying
While 67 is your FRA, it's not the only age you can start collecting Social Security benefits. You can begin as early as age 62 or delay your benefits until age 70. Each choice has a significant and permanent effect on your monthly payment.
Early Retirement: Claiming at Age 62
For those born in 1970, the earliest age to begin receiving Social Security benefits is 62. However, this comes with a substantial and permanent reduction in your monthly payment. For individuals whose FRA is 67, claiming benefits at age 62 will result in a permanent reduction of about 30% of your total benefit. This reduction factors in the fact that you will be receiving payments over a longer period.
The Calculation of Reduced Benefits
The SSA uses a specific formula to determine the benefit reduction for early claiming. For every month you collect benefits before your FRA, your benefit is reduced. If you claim at age 62, this means a total of 60 months of reductions. While it may provide an immediate income stream, it's a decision with long-term financial consequences that should be carefully weighed against your overall retirement plan.
Delayed Retirement: Claiming Between 67 and 70
If you are able to, delaying your Social Security benefits past your FRA can significantly increase your monthly payment. For each month you postpone claiming after age 67, up until age 70, you earn delayed retirement credits. For those born in 1970, these credits increase your benefit by two-thirds of 1 percent for each month, which totals an 8% increase for each full year you delay. By waiting until age 70, you could receive a payment that is 24% higher than your full retirement age amount.
The Benefit of Delayed Credits
These credits stop accumulating at age 70, making it the maximum age to claim to receive the highest possible monthly benefit. For many, this can serve as a form of insurance against market volatility or as a way to maximize a guaranteed income stream for the rest of their life. This decision is often influenced by personal health, other retirement income sources, and life expectancy.
Your Earnings Record and its Role
Your full retirement benefit is also based on your earnings record. The SSA calculates your benefit based on your 35 highest-earning years. If you work more than 35 years, your lowest-earning years are replaced by your highest-earning years, which can increase your overall benefit. This is a crucial detail for anyone planning to work longer than 35 years or for those who had periods of lower income early in their career.
Comparing Your Claiming Options
| Claiming Age | Benefit Adjustment (Relative to FRA) | Description |
|---|---|---|
| 62 | ~70% (permanently reduced) | Earliest eligibility, but with a significant reduction. |
| 67 | 100% (full benefit) | Your full retirement age, providing your unreduced benefit. |
| 70 | 124% (maximum possible) | Delaying provides a substantial boost to your monthly payment. |
Using My Social Security to Plan
To see how your personal earnings record translates into actual benefit amounts at different claiming ages, the Social Security Administration provides a valuable tool. Creating an online My Social Security account allows you to view your projected benefits and experiment with different retirement scenarios. For more information from the source, you can visit the Social Security Administration (SSA) website.
Final Thoughts on Your Retirement Strategy
Knowing that your full retirement age is 67 if you were born in 1970 is the starting point for a strategic retirement plan. The decision of when to claim your Social Security benefits—whether early, at your FRA, or delayed—is a personal one that should be made after considering your health, finances, and desired lifestyle. It's a key piece of the retirement puzzle, and understanding the options is essential for your financial security.
