Full Retirement Age (FRA) for Individuals Born in 1967
If you were born in 1967, your full retirement age (FRA) is 67. This is the age at which you can receive 100% of your primary insurance amount (PIA), which is your basic Social Security benefit. The Social Security Administration (SSA) gradually increased the FRA from 65 to 67 for those born in 1960 or later, as part of a 1983 law adjusting for rising life expectancies.
Claiming Options and Benefit Reductions
While 67 is your FRA, you have flexibility in when you choose to start receiving benefits. Your decision will have a permanent impact on your monthly payment amount. The earliest you can claim Social Security is at age 62.
Early Retirement (Age 62):
- Claiming at age 62 results in a permanent reduction in your monthly benefits. For those born in 1967, this reduction can be as much as 30%.
- The benefit is reduced by a certain percentage for every month before your FRA that you begin receiving payments.
- This option may be appealing if you need income sooner, have a shorter life expectancy, or have other income sources to supplement your retirement. However, it means a smaller check for the rest of your life.
Full Retirement Age (Age 67):
- Receiving benefits at your FRA of 67 means you get 100% of your earned benefit.
- This offers a balanced approach, providing a steady income without the permanent reductions associated with early claiming.
Benefits of Delaying Social Security Beyond Full Retirement Age
If you can afford to wait, delaying your Social Security benefits can significantly increase your monthly payment. The SSA provides delayed retirement credits for every month you postpone claiming benefits past your FRA, up until age 70.
- For each year you delay between your FRA and age 70, your monthly benefit increases by 8%.
- This results in a maximum benefit of 124% of your FRA benefit if you wait until age 70 to start collecting.
- This strategy is particularly beneficial if you are in good health and expect to have a long life, as the higher monthly payments can add up over time.
- Delayed retirement credits stop accruing at age 70, so there is no financial advantage to waiting longer.
Key Factors for Making Your Decision
Choosing the right time to start Social Security is a personal decision based on several factors. Consider your financial situation, health, and life expectancy. For example, claiming early might make sense if you have health issues or need the income immediately. Conversely, delaying could be the best option if you have other savings and want to maximize your monthly income later in life.
Factors to consider when deciding to claim:
- Health and Longevity: If you have a longer life expectancy, waiting could result in a higher cumulative lifetime payout.
- Current Income: If you are still working, claiming benefits early can lead to having some of your benefits withheld if you earn above a certain annual limit. There are no earnings limits if you are at or above your FRA for the entire year.
- Spousal Benefits: If you are married, your claiming decision can affect your spouse's benefits, especially if they are dependent on your earnings record. Spousal benefits do not earn delayed retirement credits.
- Medicare Eligibility: You can still enroll in Medicare at age 65, even if you delay your Social Security retirement benefits. It is crucial to sign up for Medicare at 65 to avoid potential late enrollment penalties.
Comparison of Retirement Ages for those Born in 1967
| Retirement Age | Benefit Amount | Important Consideration |
|---|---|---|
| Age 62 | Permanently reduced by up to 30%. | Access to income earlier but at a lower monthly rate. Earnings limits apply if still working. |
| Age 67 (FRA) | 100% of Primary Insurance Amount (PIA). | Benchmark age for full benefits. Earnings limits no longer apply. |
| Age 70 | Max benefit of 124% of FRA amount. | Maximum monthly payment possible. No further increases after age 70. |
Understanding the Benefit Calculation Process
Your Social Security benefit is calculated based on your lifetime earnings, specifically your 35 highest-earning years. If you have fewer than 35 years of work history, the SSA will fill the missing years with zeroes, which can lower your average indexed monthly earnings (AIME) and, consequently, your benefit amount. The SSA uses your AIME to determine your PIA, which is the basis for your monthly payments. Creating a "my Social Security" account on the SSA website allows you to view your earnings history and get personalized benefit estimates for different claiming ages.
How to Apply for Social Security
When you are ready to apply for Social Security retirement benefits, you can do so online, by phone, or in person. The SSA recommends applying online as it is the most convenient method. You can start the application process months before your desired retirement date. You will need information such as your Social Security number, birth certificate, and bank account information for direct deposit. If you are still working, you will also need to provide earnings information. The process can be saved and completed at a later time if needed.
Conclusion
For individuals born in 1967, navigating the Social Security system involves understanding that your full retirement age is 67. The critical decision is when to start claiming benefits, as this choice permanently affects your monthly payment. Claiming at age 62 leads to a reduced benefit, while delaying until age 70 results in the maximum possible monthly payment. By considering your personal health, financial needs, and life expectancy, you can make an informed decision to optimize your retirement income. Remember to create a my Social Security account to get personalized estimates based on your earnings history. Regardless of when you claim, be sure to enroll in Medicare at age 65 to avoid late enrollment penalties.
