Retirement is the reward for a lifetime of working and as such, ensuring that you have financial stability during your sunset years is an important endeavor that you will spend your life working towards. On average, most people will consider retiring by age 65, and when the Social Security program first started, this was the age at which a beneficiary became entitled to receive their full benefits.
In 1983, however, the Social Security program was amended and amongst these amendments was the decision to gradually increase the “Full Retirement Age” for seniors. This decision was made in order to better maintain the program’s financial health which had been facing some trouble at the time, as well as to account for growing life expectancy. As such, the retirement age then began to increase in two months increments on a yearly basis and this would continue until the full retirement age was increased to 67 years of age. Here is what you need to know.
Understanding retirement age in the context of Social Security
Throughout your working career, you will pay a percentage of your earnings into the dedicated Social Security payroll tax. This will earn you work credits which will, in turn, allow you to claim benefits from the Social Security Administration (SSA) once you reach the age of eligibility. As per current policy at the SSA, retirees can begin claiming benefits at age 62, however, this is considered as claiming early. If you claim early, a deduction of up to 30% will be locked into your benefits. The exact percentage by which your benefits will be reduced is dependent on how many months remain from the age at which you claim and your full retirement age.
The year in which you were born determines your full retirement age. For instance, in 2025, individuals who were born in 1959 have a full retirement age of 66 years and ten months. In 2026, the full retirement age will finally reach 67 years of age and this will apply to all individuals born in 1960 and later. Following this, the retirement age should remain stagnant, and any changes would require Congressional approval.
”The steady increase is related to a 1983 law passed by Congress that states the age for full retirement will continue to increase through 2027 to match a longer life expectancy,” as per the SSA.
Delayed retirement
If claiming retirement from Social Security early reduces your benefits, does delaying your retirement earn you more in benefits? The answer is yes. When calculating benefits for a claim, the SSA uses the number of work credits held by the applicant. If you delay claiming, you will earn “delayed work credits”, and for each year that you delay claiming beyond your full retirement age, you can qualify for an 8% bump to your benefits. If you delay claiming until you are 70 years old, you can receive up to 124% of the benefit you would have been eligible for at full retirement age.
In 2025, the highest paid benefit from the SSA stands at $5,108, however, it is something of a rarity to be able to earn this hefty benefit check due to the requirements that need to be met. In order to be able to claim the maximum benefit from the SSA, the beneficiary will need to have earned an income equivalent to or higher than the wage cap for a minimum of 35 years. Additionally, they will also need to delay claiming until they are 70 years of age.
Will the retirement age increase again?
Speculation has been spreading regarding the possibility of another increase to the retirement age, however, nothing has been confirmed by lawmakers. The speculation has come about as a result of the projected shortfall in funding for the Social Security program. According to the trustees’ report, the OASI trust fund is projected to become insolvent by 2033. If this trust fund is emptied, benefits will be hit with an automatic 23% cut.
SSA Commissioner Frank Bisignano recently shared a post on X clarifying that raising the retirement age is not under consideration as lawmakers scramble to find a solution to prevent the projected shortfall.