The concept of full retirement age (FRA) in Social Security is a critical yet often misunderstood aspect of retirement planning. It varies depending on your birth year, with gradual increases implemented since the 1980s to address the solvency challenges of the Social Security program. While the FRA was once set at 65, it is now being raised incrementally to 67 for those born after 1960.
Here’s an overview of how FRA works, why it matters, and how it affects your Social Security benefits.
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Retirement Age Timeline
Your FRA determines when you can claim 100% of your Social Security benefits without any reduction. For those born before 1960, FRA falls between 66 and 67. Below is a table showing FRA for individuals born between May 1958 and February 1959.
| If you were born in: | You reach full retirement age in: |
|---|---|
| May 1958 | January 2025 |
| June 1958 | February 2025 |
| July 1958 | March 2025 |
| August 1958 | April 2025 |
| September 1958 | May 2025 |
| October 1958 | June 2025 |
| November 1958 | July 2025 |
| December 1958 | August 2025 |
| January 1959 | November 2025 |
| February 1959 | December 2025 |
Why Full Retirement Age Matters
FRA is not just a milestone; it’s a key reference point for calculating your Social Security benefits. Claiming benefits before your FRA reduces your monthly payment, while delaying benefits can significantly increase them.
For example, if you were born in 1960 or later, retiring at 62—the earliest possible age to claim benefits—results in a 30% reduction in your monthly payout. The reduction occurs because:
- First 36 months: Your benefits are reduced by approximately 0.55% per month, or 5/9 of 1%.
- After 36 months: The reduction decreases to 0.42% per month, or 5/12 of 1%.
This means that if your FRA is 67 and you claim at 62, you will be 60 months early, resulting in the maximum 30% reduction in benefits.
On the flip side, delaying benefits beyond your FRA increases your monthly payments. If you wait until age 70, you can receive up to 124% of your full benefits, making this option appealing for those who can afford to delay claiming.
Claiming Benefits
While FRA ensures you receive your full benefits, it’s not the most popular age to claim. Most individuals choose to claim either at:
- Age 62: Despite the significant reduction, this remains a popular choice because many prefer to access benefits as soon as possible.
- Age 65: This is another favored age since it coincides with Medicare eligibility, making it financially practical for those concerned about healthcare costs. At 65, retirees can still receive about 87% of their full benefit amount, a less steep reduction than claiming at 62.
Delayed Benefits
For those who can afford to wait, delaying benefits until age 70 is a strategy to maximize monthly payments. This option, however, is reserved for a smaller segment of the population that either continues working past FRA or has other sources of income to cover expenses in the interim.
The Bottom Line
Addressing your FRA is crucial for making informed decisions about when to claim Social Security benefits. Whether you claim early, at FRA, or delay until age 70, the choice depends on your financial needs, health, and retirement goals.
By considering the long-term implications of your decision, you can ensure a retirement strategy that aligns with your lifestyle and economic circumstances.
FAQs
What is full retirement age?
The age when you receive 100% of Social Security benefits.
What happens if I claim benefits at 62?
You face a 30% reduction in your monthly benefit.
Can I delay benefits past full retirement age?
Yes, delaying until 70 increases benefits to 124%.
Why is age 65 a popular retirement age?
It coincides with Medicare eligibility, reducing health costs.
How do I calculate my retirement age?
Check your birth year against Social Security’s FRA chart.
