Making your money last longer is one of the core things to think about as you approach retirement and it’s important to know your full retirement age (FRA). That’s the age when you qualify for your full Social Security benefit, and it’s based on the year you were born. For anyone born in 1960 or later, the FRA is now 67. This is the last step in a gradual age increase that started back in 1983 and wraps up in 2025.
FRA Reaches Its Peak in 2025
The Social Security Amendments of 1983 kicked off a slow increase in the FRA, moving it from 65 to 67 over several decades. Now, that phase is ending. For those born in 1959, the FRA is 66 and 10 months, which means they’ll hit their FRA in late 2025. After that, everyone born in 1960 or later will need to wait until 67 to receive full benefits.
Why This Matters Now
2025 is the final year anyone will reach FRA below 67. For instance, someone born in January 1959 will reach their FRA in November 2025. After that, anyone born in 1960 or later will have to wait until age 67 to get their full Social Security benefits, starting with the first group hitting that milestone in 2027.
If you’re thinking of retiring soon, this could affect your planning and benefit calculations.
Claiming Early Means Bigger Reductions
Even though it’s possible to begin claiming Social Security as early as 62, doing so results in a permanent cut to your monthly payments. The size of that reduction depends on how many months you are away from your FRA at the time of filing.
For example, someone born in 1960 who claims at 62 will see a 30% reduction in monthly benefits. That means if you were entitled to $1,800 a month at your FRA, you’d only receive $1,260 a month if you claimed early, and that reduction lasts for life.
Delaying Benefits Can Boost Your Monthly Income
If you wait a while before claiming Social Security past your FRA, your monthly benefit increases approximately 8% more for each year you wait, up to age 70. So if your benefit at 67 is $1,800, waiting until 70 could bump it up to around $2,232 a month. But after 70, there’s no extra boost for waiting longer.
Working Before FRA? Know the Earnings Limit
If you start taking benefits before reaching FRA and continue to work, your Social Security payments could temporarily be reduced as a result of your income. For 2025, the annual earnings limit is $23,400. If you exceed this limit, your benefit will be reduced by $1 for every $2 earned over the limit.
In the year you reach your FRA, the rule changes slightly: you lose $1 for every $3 earned over a higher limit. Once you hit FRA, though, the earnings limit goes away and your full benefits kick in, no matter how much you earn.
How to Find Your FRA
Keep in mind that your FRA isn’t the same as the age you stop working. You might retire before or later than your FRA. The SSA has a tool that could help you determine when to retire.
Final Thoughts: Plan Ahead for Peace of Mind
While the FRA isn’t going up again for now, Social Security rules can still change. If you were born after 1960, it’s a good idea to keep an eye on any new laws that might affect your future benefits.
It depends on you as an individual when you would like to start claiming benefits. It depends on things like your health, your income needs, and your plans for the years ahead. It helps to talk it through early with your partner or financial advisor. Planning ahead can take a lot of pressure off later and make your retirement years more secure.
This has been written based on information from an article in the Finance Buzz.