Understanding the Maximum Benefit Age of 70
The idea that the Social Security retirement age changed to 70 is a common misconception. While you can significantly increase your monthly benefit by delaying until age 70, this was not a change to the full retirement age (FRA). Instead, it reflects a powerful incentive for delaying your claim. The real age change was the incremental increase to the FRA, which was gradually raised from 65 to 67 based on your year of birth.
The 1983 Social Security Amendments
The landmark 1983 legislation was a major overhaul of the Social Security program, primarily aimed at ensuring its long-term solvency. Recognizing that Americans were living longer and healthier lives, Congress decided to gradually raise the full retirement age. This adjustment was phased in over many years to minimize the impact on those approaching retirement. The legislation did not change the earliest age to claim benefits, which remains 62, nor did it change the age at which benefits stop increasing, which is 70.
Full Retirement Age: A Gradual Increase
The full retirement age was not moved to 70. The change was much more subtle and targeted different birth years with phased-in increases. Below is a breakdown of how the FRA was affected by birth year.
- Born in 1937 or earlier: Full retirement age is 65.
- Born between 1938 and 1959: The full retirement age increases incrementally, ranging from 65 and 2 months to 66 and 10 months.
- Born in 1960 or later: The full retirement age is 67.
This gradual shift was designed to give workers ample time to adjust their retirement savings and planning, ensuring the system's stability for future generations.
The Advantage of Delaying Until 70
The reason age 70 is so frequently mentioned in retirement planning isn't because it's a mandatory retirement age, but because it is the age when you stop accruing delayed retirement credits. For each year you delay claiming benefits past your full retirement age, you earn credits that permanently increase your monthly payment. For those born in 1943 or later, this increase is 8% per year.
Let's compare a person with a full retirement age of 67 who waits until 70:
- Full Retirement Age (67): Receives 100% of their Primary Insurance Amount (PIA).
- Delaying to 70: Receives a monthly benefit that is 24% higher (3 years x 8% per year) than at age 67.
This benefit boost is a significant factor for many people planning for a long retirement. Waiting until 70 is a strategic financial move, not a required change in policy.
Comparing Claiming Ages: 62 vs. FRA vs. 70
Choosing when to start receiving Social Security benefits is one of the most important financial decisions a person can make. Here's a quick comparison of the three most common claiming ages for someone with a full retirement age of 67.
| Feature | Claiming at 62 | Claiming at Full Retirement Age (67) | Claiming at 70 |
|---|---|---|---|
| Benefit Amount | Permanently reduced by up to 30% | Receives 100% of Primary Insurance Amount (PIA) | Receives highest possible monthly benefit (PIA plus delayed retirement credits) |
| Benefit Duration | Longer duration, but smaller monthly payments | Moderate duration and monthly payments | Shorter duration, but significantly larger monthly payments |
| Delayed Retirement Credits | Not applicable; reduces benefit amount | Not applicable | Stops accruing delayed retirement credits after age 70 |
| Financial Needs | May be necessary for those needing immediate income or forced into early retirement | A balanced approach for many retirees | Ideal for those with sufficient savings to delay income and maximize monthly payments |
Factors to Consider When Claiming
Beyond the benefit amount, several factors influence the best time for you to claim your Social Security benefits:
- Health and Longevity: If you or your family have a history of living long, delaying can be very beneficial. A higher monthly payment later in life can help offset the risk of outliving your savings.
- Other Income Sources: If you have a pension, investments, or other retirement accounts, you may have the flexibility to delay Social Security and let your benefits grow.
- Spousal and Survivor Benefits: For married couples, the higher earner's decision affects the survivor's benefit. Delaying benefits can provide a higher survivor payment for the remaining spouse.
- Need for Income: If you are in poor health, have a limited life expectancy, or simply need the income to cover expenses, claiming early might be the best option.
For more information on planning your retirement, visit the official website of the Social Security Administration [https://www.ssa.gov/benefits/retirement/]. This valuable resource offers calculators and detailed guides to help you make an informed decision.
Conclusion
To be clear, Social Security's maximum retirement age is not 70. Rather, 70 is the maximum age to accrue delayed retirement credits, and those born in 1960 or later have a full retirement age of 67. The gradual increase of the full retirement age was part of the 1983 Social Security amendments, not a blanket shift to age 70. Understanding these nuances is key to making the best decision for your retirement, whether that means claiming early, at your full retirement age, or maximizing your benefits by waiting until 70.
