The Social Security Administration (SSA) has announced changes to the full retirement age (FRA), which is now set at 67 for those born in 1960 or later. This adjustment, implemented in 1983, was phased in over time to address funding concerns. The minimum age to begin claiming Social Security benefits remains at 62.
However, the SSA increases benefits for individuals who delay claiming, encouraging many to wait until they reach their FRA. If beneficiaries delay beyond age 67, their benefits will increase by 8% each year until the age cap of 70. The FRA varies depending on an individual’s birth year.
For those born between 1943-1954, the FRA is 66 years old. For those born in 1955, the FRA is 66 years and two months. For those born in 1956, the FRA is 66 years and four months.
Changes to full retirement age
For those born in 1957, the FRA is 66 years and six months. For those born in 1958, the FRA is 66 years and eight months.
For those born in 1959, the FRA is 66 years and ten months. These changes come amid growing concerns about the cost of living and the financial challenges faced by retirees. According to Kelley Taylor from Kiplinger, food prices have increased by 2.5%, rent and housing costs by 4.4%, and healthcare services by nearly 3% this year.
Additionally, nearly half of Social Security beneficiaries owe federal income tax on their benefits, despite the original intent for such taxes to apply only to top earners. The United States is home to 59 million adults aged 65 and older, and for many beneficiaries, Social Security is a primary source of income. However, the average payment of just under $2,000 per month poses significant challenges amid rising living costs and taxation complexities.
These changes highlight the evolving landscape of retirement planning and the necessity for beneficiaries to stay informed about the shifting policies affecting their financial future.