If you were planning to retire next year, double check your math because a law passed in the ’80s is annually raising the age when Americans can collect their full Social Security benefits. And next year is no exception.
History of the Law
In 1983, Congress passed a law that gradually increases the age at which people may receive 100% of their Social Security benefits. The increase is aimed to match increasing life expectancy.
Full Retirement Age
Full retirement age is based on the number of years you have worked as well as your annual income throughout your working life, according to the Social Security Administration.
Calculating Full Retirement Age
The law increased the age beginning with people born in 1938 or later, Social Security officials said. The retirement age has been increasing by two months for each subsequent birth year.
Impact of the Increase
Starting in 2023, for example, if you were born in 1957, you would have reached your full retirement age — and become eligible to collect your full Social Security benefits — when you turned 66 years and 6 months. In 2024, if you were born in 1958, you must be 66 years and 8 months old to claim your full benefits. Next year, the full retirement age is increasing by two months again: People born in 1959 must be 66 years and 10 months old to get their full benefits.
Rise in Full Retirement Age
For those born in 1960 and later, the retirement age will jump to 67.
Early Retirement Options
Social Security recipients have the option of claiming benefits earlier than the designated full retirement age. You can begin receiving your benefits as soon as you turn 62, but the amount will be greatly reduced, about 25% less if your full retirement age is 66 and 30% less if it’s 67.
Delayed Retirement Benefits
If you wait until you turn 70 to start taking benefits, you will be rewarded with a higher amount.
Calculating Early Retirement Benefits
To figure out when you can claim your full retirement benefits or what you can claim if you retire early, use the Social Security online calculator.
Conclusion
In conclusion, if you were planning to retire next year, make sure to check the new full retirement age based on your birth year. With the increase in age, it is essential to plan your retirement accordingly to ensure you receive the benefits you are eligible for.
FAQs
Q: What is the full retirement age?
A: The full retirement age is based on the number of years you have worked as well as your annual income throughout your working life.
Q: How often is the full retirement age increased?
A: The full retirement age increases by two months for each subsequent birth year, starting with people born in 1938 or later.
Q: What happens if I claim benefits earlier than my full retirement age?
A: If you claim benefits earlier than your full retirement age, you will receive a reduced amount, about 25% less if your full retirement age is 66 and 30% less if it’s 67.
Q: Can I delay receiving benefits and increase my amount?
A: Yes, if you wait until you turn 70 to start taking benefits, you will receive a higher amount.
Q: Where can I find information on calculating my full retirement benefits?
A: You can use the Social Security online calculator to figure out when you can claim your full retirement benefits or what you can claim if you retire early.
