There are millions of Americans who rely on Social Security benefits as their primary source of income. With that being said, the Social Security Administration (SSA) is raising the Full Retirement Age (FRA) in 2026. This is the age at which beneficiaries can claim 100% of their benefits.
For all those who were born in 1960 or later, the FRA is now 67 years old. This simply means that born in 1960 will only qualify for their full benefits in 2027. As the years went by, life expectancies began to increase and raising the retirement age will support this and maintain the financial stability of the Social Security program.
Claiming Benefits and Before FRA
Indeed you can start collecting benefits at the age of 62 years, however, since you claim before reaching FRA, your benefits will be permanently reduced by approximately 30%.
Unfortunately, the reality of the new FRA is that those born in 1960 will now have to wait two extra years to claim the same amount of benefits that their older colleagues have received, and if you don’t wait, you find yourself with reduced benefits.
Who Will Be Affected By This Change?
The FRA increase will affect those born between 1960 and 1964 (Baby Boomers) and there after individuals born between 1965 and 1980 (Gen X).
It can be noted that many people in these age groups may not be prepared for retirement. As Baby Boomers begin to reach 65, they don’t seem to have sufficient savings. There are millions of Americans who depend on Social Security for a major portion of their retirement income.
Even though the raise in FRA gives retirees more time to plan ahead, this doesn’t necessarily mean that they will have more, especially in a time where the cost of living is constantly increasing.
The Struggles of Savings
Experts note that Gen X began their careers with stagnant wages and their income hasn’t necessarily kept up with the rising costs of expenses. This generation is stuck with student loans and home mortgages, and this makes it difficult for them to put money aside and wait longer to claim 100% of their Social Security benefits.
The higher age is a signal that retirement planning is no longer a passive exercise. For those born in 1960 or later, longevity must be planned, and financial moves must be calculated to ensure that your lifetime benefit isn’t diminished simply because the government moved the goalposts.
Make Sure You Plan Ahead
The FRA is locked in for 2026 and now it’s time for future retirees to be proactive. Make sure you make the most out of your Social Security benefit. Be strategic with your planning.
- Create an online Social Security account and make use of the online calculator tools. Use the calculator to determine what your benefit will look like if you claim at different year. This will give you an understanding of how much you need to save or how long you need to work.
- If you plan to retire before FRA, make sure you have sufficient savings to fund your lifestyle, as early retirement will permanently reduce your Social Security benefits. Make sure you budget accordingly especially for medical bills.
- If possible, wait until FRA or at least until age 70 to claim benefits. This will ensure that you get the maximum out of your benefits. This is important for all those living on fixed incomes and rely on Social Security as their primary source of income.
As Social Security continues to undergo changes, beneficiaries must keep themselves informed and follow verified updates from the official SSA website. If need be, consult with a financial advisor to assist with planning.