Social Security has been a financial backbone for millions of retirees for many years, and this program is about to undergo a change. In early 2026, age 67 will be the age at which workers can claim their full Social Security benefits.
Even though this change might seem like something big, it can have a significant impact on millions of Americans and how much they collect in monthly benefits.
How Social Security Came to Be
Social Security started in 1935 and was initially created to assist the older American population financially. At that time, life expectancy was just above 60 years. At the time, the Social Security system was considered secure for many years.
Why the Retirement Age Is Changing
Many years later, during the 1980s, things changed. Americans were living longer and birth rates declined. There were fewer workers paying into the Social Security system, and Social Security was paying out more than it was actually taking in. This created the idea that Social Security could potentially run out of funds.
In 1983, President Ronald Reagan signed into law a bipartisan agreement. In this agreement, the Full Retirement Age (FRA) was set to increase from 65 to 67 years. However, this did not happen instantly; it gradually increased over many years.
For example:
- People who turned 65 in 1990 still had an FRA of 65.
- Starting in 1991, the age rose by two months each year.
- By the mid-1990s, the FRA had reached 66, where it stayed for more than a decade.
- After 2008, it began climbing again toward 67.
What the New Age Means for Your Benefits
Your FRA is the age at which you can collect your full Social Security benefit without being penalized for it. This simply means that if you claim before FRA, your monthly benefit payment will be permanently decreased. If you wait beyond your FRA (until age 70), your benefit payment will increase because you will receive delayed retirement credits for each month you delay claiming benefits.
Choosing the Right Retirement Age
The choice of when you want to start claiming Social Security benefits is entirely up to you. This is a personal choice influenced by many factors such as individual health, life expectancy, and personal financial needs. All those citizens who are in fairly good health and expect a longer retirement may find that this will be beneficial to them. On the other hand, there may be citizens who may require earlier access to their funds.
Couples should also take into consideration spousal and survivor benefits, which can be significantly affected by the timing of each partner’s claim.
The Program’s Uncertain Future
We know that the FRA will increase to 67, but this still does not change the fact that current data predicts that Social Security funds will be depleted by 2034.
There are solutions available to solve this, but they need to be implemented as soon as possible. The solutions include increasing payroll taxes or increasing the FRA even further.
Preparing for What’s Ahead
The change to an FRA of age 67 shows us that Social Security is indeed evolving, and citizens need to plan effectively. It is important to be knowledgeable about the topic and understand the best age to claim your benefits; this will allow you to get the most out of your Social Security benefits.
Workers who are approaching retirement should consider speaking with a financial advisor and making decisions that will best suit their lifestyle. Be mindful of all the factors that will affect this, such as health as well as your financial goals, and make a proactive decision that will benefit you.
The right decision will look different for everyone.