A new year, a new number for Social Security and the benefit program’s full retirement age.
Most people associate the age of 65 with retirement – although there’s data suggesting the average American retires at 62. That’s the age at which you can begin to take Social Security, but you can boost the size of your monthly benefits check if you wait longer.
You can get the most Social Security benefits if you wait until your “full retirement age,” which used to be 65, but it’s gradually increased over the years – and it’s up to 67 years of age for those born in 1960 or later.
This isn’t exactly news, because the “full retirement age” timetable for program was set in legislation passed in 1983 by Congress gradually raising the “full retirement age” by a few months every year – from 65 to 67. What’s made it important is that people who may be reaching retirement age need to keep the figure in mind as they consider joining the 68 million Americans currently getting benefits..
“There’s nothing that kicks in January 1. It’s more connected to when your birth is and therefore when your full retirement age is,” Joel Eskovitz, senior director for Social Security and savings at the AARP Public Policy Institute, told USA TODAY. “You get lower benefits if you claim before that retirement age. Every month early you claim, you get a reduction.”
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When can I retire and get Social Security?
You can retire when is most prudent for you, but you cannot file for Social Security benefits until the age 62.
At age 59½, you can begin withdrawing from tax-advantaged retirement savings accounts such as 401(k)s and IRAs without the Internal Revenue Service exacting a 10% penalty tax .
The longer you put off taking Social Security, the bigger your monthly check. That’s where “full retirement age” kicks in; it’s the age when you get what’s considered full Social Security benefits. But that age is dependent on when you were born.
“You can start at 62, but you take a major cut relative to say, age 70, and then every year you delay is another 8% (increase) until you reach your maximum benefit,” Gal Wettstein, a senior research economist at the Center for Retirement Research at Boston College, told USA TODAY.
You could also begin claiming Social Security benefits before you officially retire, if you are 62 or older. However, if you earned more than $22,320 in 2024, withholding would have been taken from your Social Security payments. After you reach “full retirement age,” Social Security will recalculate your benefit amount and give you credit for any months you did not get a benefit because you were working.
“Some people are surprised by that and … think that money is gone forever, which is not true,” Eskovitz said.
President-elect Donald Trump has pledged to eliminate Social Security benefit taxes on those whose incomes meet certain thresholds.
How can I get the most Social Security benefits?
To collect what’s considered full Social Security benefits, you wait until at least your “full retirement” age. For those born from 1955 and on, the retirement ages are as follows:
- 1955: 66 years and two months
- 1956: 66 years and four months
- 1957: 66 years and six months
- 1958: 66 years and eight months
- 1959: 66 years and 10 months
- 1960 and later: 67 years of age
Putting off claiming your benefits a bit longer can pay off, too. For each full year you delay claiming benefits after your “full retirement age,” your benefit increases by 8% annually. This delayed retirement credit increases until the age 70.
For instance, if you filed for Social Security this year at “full retirement age” this year, your maximum benefit would be $3,822, according to the Social Security Administration website. But let’s say you retire this year at age 62 and file, your maximum benefit would be $2,710. If you are age 70 and filed this year, your maximum benefit would be $4,873.
There’s no ultimate answer for when to file for Social Security. “This is a personal decision, so you have to factor in all sorts of things, your current employment, your health, your family, your health history,” Eskovitz said, who notes that AARP has a Social Security resource center online. “But it is also a one-time decision. If you claim before your full retirement age, that penalty will stay with you for the rest of your life. So that’s just something to consider.”
What is the Social Security 2025 Cost of Living Adjustment (COLA)?
To help retiree benefits keep up with inflation, Social Security regularly adds in a cost of living adjustment (COLA). Effective January 2025, Social Security benefits will increase by 2.5%.
That means the average Social Security recipient will get an extra $50 per month. That will increase the estimated average monthly Social Security benefit from $1,927 to $1,976, the SSA says. Retired couples who jointly receive benefits will see an increase of $75 to an estimated average of $3,089 monthly.
How important is your full retirement age for Social Security?
Opinions differ, but the “real important ages are 62 (your first year of Social Security eligibility) and 70, which is the maximum claiming age,” Wettstein said. “Any year that you delay claiming after 62 until you reach 70, increases the monthly benefit that you get.”
Many people still look at 65 as “a pivotal age for retirement and it is in many ways more important than the full retirement age,” he said, because it’s the year people become eligible for Medicare.
Will Social Security’s full retirement age go up?
There’s no regulations that increase it currently, but it could be considered in the future because the system “is kind of in a deficit (because) less money comes in than goes out,” Wettstein said.
Benefit outlays could be slowed if the program’s full retirement age was increased to perhaps, 68 years of age, because potential Social Security recipients might “claim a full year later,” he said.
Contributing: Bailey Schulz
Follow Mike Snider on X and Threads: @mikesnider & mikegsnider.
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Full retirement age, also known as FRA, is the age at which you are eligible to receive full Social Security retirement benefits. The FRA varies depending on your year of birth, ranging from 66 to 67 years old for those born in 1943 or later.
If you choose to start collecting Social Security benefits before reaching your FRA, your benefits will be reduced. On the other hand, if you delay taking benefits until after your FRA, your monthly payments will increase. This is known as delayed retirement credits.
It’s important to consider how your FRA will affect your benefits and overall retirement income. Starting benefits early may provide immediate financial relief, but it can result in a lower monthly payment for the rest of your life. On the other hand, delaying benefits can lead to higher monthly payments, which can be beneficial in the long run.
Understanding how full retirement age affects benefits can help you make informed decisions about when to start collecting Social Security. Consider consulting with a financial advisor to determine the best strategy for maximizing your retirement income.
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