Most Americans may consider the standard retirement age to be 65, but the so-called “full retirement age” for Social Security is already higher than that — and it's set to reach an even older age in 2025.
Social Security's full retirement age (FRA) refers to the time when workers can begin claiming their full benefits, which are based on the number of years they have worked as well as their earnings during their working years. Is. The longer a person works and the higher his income, the more he can get from Social Security when he eventually claims his benefits.
While the FRA was 65 years old, Congress overhauled the program in 1983. Increase retirement age limit To take into account longer life expectancy.
As part of that reform, the FRA is increasing by two months at a time, depending on a person's birth year. For example, people who were born in 1957 reach their FRA when they turn 66 years and 6 months, or starting in 2023; But people born in 1958 must turn 66 years and 8 months of age, or beginning in September 2024, to qualify for their full benefits.
Full retirement age has been set increase Again increased by two months for those born in 1959, up to the age of 66 years and 10 months. That means the higher FRA for that group will take effect in 2025, with people born in 1959 starting to qualify for their full benefits in November 2025. (You can calculate when you can get your full benefits at this Social Security Administration page,
Of course, there is flexibility about when to claim Social Security benefits. People can claim as soon as they turn 62, but the trade-off is a reduced benefit that remains locked out for the rest of their retirement.
For example, claiming at age 62 would give you a benefit that is about 30% less than your full benefit – a sacrifice that many older Americans choose, given that many are forced into retirement. earlier than expected Or because they believe it makes more sense to claim more years of guaranteed retirement income, even if at a lower amount.
Young Boomers and Gen Xers
The increase in FRA marks the last age change for people born in 1959, with the last jump being for workers born in 1960 or later. Those Americans won't be able to claim their FRA until they reach age 67, meaning someone born in January 1960 will have to wait until January 2027 to receive their full retirement benefits.
Its greatest impact will be on the youngest Baby Boomers and Gen Xers, whose subsequent generation spanned from 1965 to 1980.
However, according to recent research, these workers are the least prepared for retirement. The youngest boomers — those born between 1959 and 1965 — started turning 65 this year, but many of them lack enough savings to support themselves in old age, according to the ALI Retirement Income Institute. found earlier this year.
The study found that nearly 1 in 3 of these young boomers will rely on Social Security benefits for at least 90% of their retirement income when they turn 70. But Social Security benefits are designed to replace about 40% of a person's working income.
Meanwhile, Gen The average retirement savings of Gen $1.5 million Americans say they need to retire comfortably. Another study found that nearly 40% of Gen Xers don't have a dime saved for retirement.
In the meantime, older Americans can also maximize their Social Security benefits by delaying claiming until age 70. At that point, a person's profit increases by about 25% more than his absolute profit. But only 4% of Americans wait until they are 70 to claim the maximum Social Security benefits, According According to a recent study from the Transamerica Center for Retirement Studies.