Determining the best time for you to begin receiving Social Security benefits has become a more complex endeavor in recent decades. Technically, you can elect for these benefits as soon as you reach age 62, or you could wait all the way until you’re 70. An important benchmark to use in this decision is your full retirement age (FRA).
Your FRA is the point at which you’re able to earn the full amount of benefits that you’ve earned throughout your career, according to the Social Security Administration (SSA). However, that doesn’t mean it’s the age at which you can receive your maximum benefit, as we’ll see in more detail below.
Full Retirement Age Defined
Your Full Retirement Age is the age at which you can claim the full benefits you have accrued throughout your working years. Though you can technically retire and start claiming Social Security payments at age 62, retiring at that point won’t give you access to your full retirement benefits.
Your FRA is determined based on the when you were born, explained in detail below.
Full Retirement Age: Figuring Out Your FRA
For the first several decades of the Social Security program, everyone had the same FRA: 65. But Congress introduced amendments in 1983 that would allow the normal retirement age to increase over time. Congressional leaders felt that a gradual adjustment of the full retirement age was necessary to ensure that there was enough money to keep Social Security from facing insolvency.
The result is that not everyone has the same full retirement age. The age at which you gain access to full Social Security benefits depends on the year you were born. If you were born between 1943 and 1954, your full retirement age is 66. If your birth year is 1960 or after, your normal retirement age is 67. Anyone born between 1955 and 1959 has a normal retirement age between 66 and 67 – that is, 66 plus a certain number of months. For instance, if you were born in 1958, your full retirement age is 66 and eight months.
The day you were born could also affect your normal retirement age. If you were born on January 1, you’ll need to use the full retirement age for the folks who were born a year before you. If you were born on the first day of any month, your FRA will be the same as someone born the previous month. For example, if you reach your FRA on March 1, you’ll receive full benefits for the month of February, too.
Here’s a complete breakdown of the full retirement age by birth year.
|Full Retirement Age|
|Birth Year||Full Retirement Age|
|1943-1954||66 years old|
|1955||66 and two months|
|1956||66 and four months|
|1957||66 and six months|
|1958||66 and eight months|
|1959||66 and 10 months|
|1960 and later||67 years old|
Full Retirement Age and Your Benefit
The SSA has a set formula to calculate the amount of your monthly benefit check, also known as your primary insurance amount (PIA). The formula is somewhat convoluted, but it factors in your 35 highest years of earnings, each of which are indexed for inflation.
Your full retirement age determines when you’re eligible to receive your PIA. So if you elect for benefits any time before your FRA, you’ll receive a lower monthly benefit. If you wait until after your FRA to elect, you’ll receive a higher benefit. For every month you wait from the age of 62 until your FRA, your monthly benefit will increase incrementally. For instance, if you were born in 1960 or after, you can receive 86.1% of your benefits at age 64 and 11 months. You can collect 92.2% of your benefits once you hit 65 and 10 months.
What may be confusing to some people is that the amount you receive at your full retirement age is not actually your maximum possible benefit. You can continue to delay electing for benefits past your FRA and your benefit amount will continue to increase. Once you reach age 70, your benefit amount will max out.
But even if it’s not the age of your maximum benefit, your full retirement age has other relevance. If you’re working and receiving Social Security before hitting your full retirement age, the SSA may deduct some money from your benefit amount. For 2019, your benefit will be reduced by $1 for every $2 you earn above an earnings limit of $17,640. This earning limit rises to $18,240 in 2020. Once you reach full retirement age, though, you can earn all the money you want without if affecting your Social Security benefit.
How the Full Retirement Age Affects Social Security
Full retirement age also affects the Social Security program as a whole. Americans are living longer and the working-age population is shrinking. Some have proposed raising the FRA to 70, based on predictions that the Social Security reserve fund could run out of money by 2034.
Even if the reserve fund is depleted, however, future retirees should expect to get something from Social Security. Social Security income is taxable, which generates revenue. Plus, the Social Security program gets funding from the interest generated by trust funds. So future retirees will likely receive around 75% of every dollar that they currently contribute to the program.
The Full Retirement Age for Survivors Benefits
Your full retirement age may be different if you’re a widow or widower collecting survivors benefits. In fact, it may be earlier than the normal retirement age for your own Social Security benefits.
If you were born in 1956, for example, your FRA is 66 and four months. But survivors may begin receiving benefits four months earlier, at age 66.
The earliest you can begin claiming survivors benefits is 60. But much like standard Social Security benefits, you’ll receive a reduced monthly benefit amount if you want access to your survivors benefits before you reach your full retirement age.
Your full retirement age is the age at which you gain full Social Security benefits. That age is important, both for workers who are deciding when to claim their retirement benefits and those who are concerned about the future of Social Security.
Tips for Planning for Retirement
- Don’t forget to factor Social Security benefits into your savings total. Use SmartAsset’s Social Security calculator to determine how much you’ll receive.
- A financial advisor can be a big help in figuring out how Social Security fits with other income sources in your retirement plan. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free financial advisor matching tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
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