For many years, the full retirement age in the United States was 65 years of age. That’s because 65 was the age citizens were able to start collecting Social Security. But that’s no longer the case. In 1983, in response to longer life spans, the United States Congress passed the Social Security Reform Act, which changed the compensation, financing, and benefit arrangements of Social Security. The act also put in place a scale that gradually increased the age at which people could start collecting Social Security.
The full retirement age for collecting Social Security should not be confused with the age you can sign up for Medicare, which remains 65.
Full Retirement vs. Early Retirement
Full retirement age means that you can apply for Social Security and get 100% of your benefits when you reach this date. The benefit amount you receive is based on the average of your earnings during your 35 highest-earning working years. If you haven’t worked a total of 35 years, the calculation uses zeros for the years you didn’t work. The benefit you receive is called your primary insurance amount or PIA.
Here’s a chart to help you see when your full retirement age is:
| If you were born in: | Your full retirement age is: |
|---|---|
| 1943-1954 | 66 |
| 1955 | 66 and two months |
| 1956 | 66 and four months |
| 1957 | 66 and six months |
| 1958 | 66 and eight months |
| 1959 | 66 and ten months |
| 1960 and later | 67 |
If you want to know how much money you might get, the Social Security Administration’s retirement calculator will give you an estimate of the benefits you can expect.
Claiming benefits before full retirement age is known as early retirement. Claiming early retirement starts at age 62 no matter when you were born. But the earlier you file for Social Security, the lower the payments you’ll receive. For instance, if you turn 62 next year and plan to retire, leaving the workforce could mean as much as a 30% decrease in benefits.
When Should You Apply for Social Security?
Sometimes early retirement is a good idea. People who experience severe health issues or have disabilities may want to start receiving benefits before reaching full retirement age.
However, if you can wait until full retirement age to collect Social Security, it’s often in your best interest to do so. Not only will the amount you receive be higher, but your accumulated lifetime benefits will most likely be more than if you took early retirement.
Factors That Can Impact Your Social Security Benefits
Waiting until age 70 to collect your benefits also increases the amount you receive from Social Security. Delaying any longer, like until 71 or 72, won’t make any difference in the amount of money you receive. It’s also worth noting that working for at least 35 years boosts your benefits, so try to do so if you can.
If you’re undecided as to when to retire, a financial advisor can help you weigh your options.
Seniority is published by Finance of America Reverse LLC. The views expressed in this publication are those of the author alone and do not necessarily reflect the views and opinions of Finance of America Companies. This article is intended for general informational and educational purposes only and should not be construed as financial or tax advice. For more information about whether a reverse mortgage may be right for you, you should consult an independent financial advisor. For tax advice, please consult a tax professional.
