While age may be just a number, it plays an important role in Social Security benefits. Social Security’s full retirement age (FRA)—the age at which a retiree is guaranteed to receive their full primary insurance amount (PIA) for life—varies by year of birth and is currently 66 years and two months for people born in 1955, increasing gradually until it reaches 67 for those born in 1960 or later. People who claim benefits before FRA receive a reduced benefit for life; the earlier they start, the more their monthly checks are cut. Many policymakers are discussing raising the FRA, which would be a major change in the system. The average life expectancy at age 65 has risen over the four decades since Congress last addressed Social Security’s finances, and raising the FRA will bring payments in line with life expectancy while saving roughly a third of the current 75-year shortfall.
But increasing the FRA isn’t as easy as simply increasing payments. The change requires an up-front investment in additional revenue, such as increased payroll taxes or reduced benefit reductions, and there are likely to be significant repercussions on low-income beneficiaries who will have less money to spend throughout their retirement. As a result, most Americans across party lines oppose raising the FRA, according to a recent study by the Center for Retirement Research at Boston College.
At What Age Do You Get 100% of Your Social Security?
The age at which you become entitled to 100% of your Social Security benefit varies by year of birth. It starts at 66 and 4 months for people born in 1956 and gradually increases to 67 for those born in 1960 or later. These ages apply to the retirement benefits you earn on your work record and spousal and survivor benefits. If you choose to claim benefits before your FRA, you will receive a reduced amount. If you delay your claims, your monthly payments will increase, but not significantly so.
Many policymakers support raising the full retirement age as a way to reduce the long-term deficits of Social Security and Medicare. They often cite the growth in life expectancy as a rationale. However, that figure masks significant differences by income, sex, and race. Raising the retirement age would cut benefits for new retirees and hit lower-income people harder since they rely more heavily on Social Security.
If you decide to file for benefits before your FRA, the SSA will reduce your monthly payment by 5/9 of one percent per month for each month that you begin before your FRA, up to a maximum of 36 months. It’s not an easy calculation to make, but it is worth it if you can comfortably afford to wait.