Did you know that the age at which you decide to begin claiming retiree benefits has a rather significant impact on the final amount that will appear on your monthly checks?
Any working individual knows that the Social Security benefit is determined in relation to their contributions to the Social Security payroll tax during their working career. And while benefits can be claimed from the Social Security Administration (SSA) from age 62, claiming too early could cause to lose up to 30% of your benefit. This is because of the SSA’s policy of a full retirement age.
In simple terms, the full retirement age is the age at which you become entitled to 100% of your benefit. When the Social Security program was initially introduced, the full retirement age was 65, however, this has been gradually increasing over the course of decades to bring it up to age 67 — and this will take place next year in 2026. Here is everything you need to know.
What is the full retirement age?
When the Social Security program first began close to a century ago, the full retirement age was 65 for any all beneficiaries regardless of year of birth. In 1983, however, the program underwent several amendments, one of which was the decision to gradually increase the full retirement age so as to bring it up to age 67. This decision was implemented in order to better maintain the financial health of the program, as well as to account for growing life expectancy.
The full retirement age has since been gradually increasing in two months increments each year, and now the year in which you were born matters when determining your new full retirement age. In 2025, the full retirement age increased to 66 years and ten months for those born in 1959. Since the full retirement age increases in two months increments, this means that 2026 will be the year that the full retirement age finally reaches age 67 and this will apply to anyone born in 1960 and later. Following this, the full retirement will no longer be increased.
How does full retirement age impact your benefits?
If you decide to claim benefits before reaching your full retirement age, your benefits will be reduced by up to 30% depending how many months remain between your current age and your full retirement age. This reduction is permanent, meaning that your benefits will not be recalculated once you reach full retirement age.
While your lifetime earnings are the primary determining factor in how much you will receive from the SSA in benefits, the age at which you claim plays arguably the second most important role. Below are some instances of how your benefit will be reduced if you claim early, assuming a base benefit of $1,000:
- Those born between 1943 and 1954 have a full retirement age of 66. If they claim at age 62, there are 48 months between their current age and their retirement age. This will result in a 25% cut to their benefits, which means they will only receive $750 instead of $1,000.
- Someone born in 1958 has a full retirement age of 66 years and eight months. If they claim at age 62, there are 56 months between their current age and their retirement age. The result will be a 28.33% cut to their benefits, bringing their total down from $1,000 to $716.
Alternatively, if you decide to delay your claim beyond your respective full retirement age, you will earn delayed retirement credits. For each year that you delay your claim until you are aged 70, you will receive an 8% increase to your benefit. For instance, if someone with a full retirement age of 67 delays their retirement until they are 70, they will then be eligible for 124% of their benefit when they do claim.