Social Security retirement age is changing this year. Here's what you need to know
The full retirement age to collect Social Security benefits has once again shifted, meaning Americans born in 1960 who want to receive full benefits will have to keep working until they reach 67 years old.
The full retirement age (FRA) is the age at which Americans can access their full Social Security benefits without incurring a financial penalty for early retirement.
The increase is the result of amendments to the Social Security Act implemented in 1983 which were meant to adjust for longer life expectancies and to counteract financial solvency issues related to the program.
The change specifically affects Americans born in 1960 this year, because they will be turning 65 in 2025 — formerly the full retirement age — but will now have to wait for two years until they turn 67 to claim full benefits.
Workers who want to retire early can still claim their Social Security as early as age 62, but doing so incurs a penalty that reduces their monthly benefit by 30 percent.
Likewise, working past the FRA, up to age 70, increases the monthly payments thanks to delayed retirement creids.
Under the current structure, someone who might qualify for $1,000 monthly benefit if they retired at age 67 would only receive $700 per month if they choose to retire at 62.
If they waited until they were 70 to retire, they would receive $1,240 per month, which is a 24 percent increase over what they would have collected at age 67.
The new change doesn't affect anyone born before 1960 — they can still retire and collect their full benefit so long as they've hit the FRA for the year they were born.
For example, anyone born between the years 1943 and 1954 can retire with full benefits at age 66. For those born in 1957, the FRA is 66 years and six months, and for those born in 1958 the FRA is 66 years and eight months.
The increase to age 67 is the last scheduled increase under the 1983 amendments to how Social Security is distributed, though that does not mean that future legislation or executive action could not push the retirement age back even further.
In March, the House Republican Study Committee unveiled its budget proposal that included a call for "modest adjustments to the retirement age for future retirees to account for increases in life expectancy."
They did not include a specific new age for retirement, but it is presumably older than 67.
House Republicans justified the call by pointing to Social Security insolvency, which essentially means Social Security is running out of money to pay out to seniors.
The trust fund for retirement benefits could be depleted between 2033 and 2034, based on current projections, after which the system would only be able to pay out 77 percent of scheduled benefits, according to a 2024 report by the Social Security Board of Trustees.
Lawmakers have not been able to reach an agreement on how that crisis should be handled.
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