Retiring at age 65 is typically the norm for most working individuals. If, however, you plan to rely on Social Security benefits during your retirement, retiring at 65 may not be the wisest course of action (depending on your year of birth). This is because of the policy of the Full Retirement Age that is upheld by the Social Security Administration (SSA) and understanding how it works can make the world of difference to your benefit income.
When the Social Security program was first introduced almost a century ago, the retirement age was 65. This meant that if you began claiming at age 65, you would be entitled to receive your full benefits. Skipping forward a couple of decades to 1983, the program underwent several amendments, one of which resulted in the gradual increase of the retirement age. The program was facing funding issues at the time, which had likely worsened due to increased life expectancy. As a result, it was decided in 1983, that the full retirement age would gradually increase in two months increments until it reaches 67 — and this will occur in 2026. Here is what you need to know.
How does retirement age work in the Social Security program?
Social Security retirement benefits can be claimed as early as age 62, however, this will be considered as claiming early. If you claim early, you will lock yourself into a reduced benefit of up to 30%. The exact percentage by which your benefits will be reduced if you claim early is determined in relation to the number of months between the age at which you claim and your full retirement age.
If, for instance, a 62 year old retiree who was born in 1955 decides to begin claiming benefits, they will be faced with a 25.83% reduction to their benefit. The full retirement age for someone born in 1955 is 66 years and two months. If someone born in 1955 claims retirement benefits at age 62, there will be a total of 50 months between their current age and their full retirement age, resulting in the approximately 26% reduction to their benefit. In short, the more months between your current age and your full retirement age, the higher the reduction to your benefits (with 30% being the reduction cap).
As noted above, the full retirement age has been gradually increasing by two months each year since the 1983 Amendments to the Social Security program so as to bring the retirement age up to 67. This change was implemented in order to better maintain the financial health of the program, as well as to account for growing life expectancy.
In 2025, the full retirement age increased to 66 years and ten months for those born in 1959, which means we are one increase away from the end of retirement age increases. Next year in 2026, the full retirement age will increase one final time, bringing it up to 67 years of age for those born in 1960 and later. Following this, the full retirement age will remain stagnant and any further increases will require Congressional approval.
Claiming late
If claiming benefits early reduces the amount you receive from the SSA, and claiming precisely at your full retirement age entitles you to your full amount, the logic dictates that delaying you benefits should earn you an extra bump to your benefits — and this is indeed the case.
If you delay claiming benefits beyond your full retirement age until you are 70, you will earn delayed retirement credits. For each year that you delay claiming, you will earn an additional 8% in benefits. As such, for someone with a full retirement age of 67, if they delay claiming until they are 70, they will be eligible to receive 124% of the benefit they would have received at full retirement age.
In 2025, the maximum amount paid by the SSA is $5,108. However, to earn this figure, the retiree would need to have earned an income equivalent to or higher than the wage cap for 35 years, while also delaying claiming until age 70.