How the Federal Government Defines Full Retirement Age
The federal government has set the benchmark for retirement benefits, called full retirement age (FRA), or normal retirement age. If you begin retirement benefits at this age, you receive full retirement benefits (FRB), also known as normal retirement benefits. Begin benefits earlier, and you receive lower monthly benefits. Delay receiving benefits after FRA, and you receive a higher annual payment.
For many decades, FRA was 65. The reforms of 1983 phased in a higher FRA for anyone born after 1937 (anyone who turns 65 after 2002). When fully phased in, the schedule creates a new FRA of 67 for anyone born after 1959. Check out the following table for a schedule of FRAs to see where you fall.
Age to Receive Full Social Security Benefits
|Year of Birth||Full Retirement Age (FRA)|
|1937 or earlier||65|
|1938||65 and 2 months|
|1939||65 and 4 months|
|1940||65 and 6 months|
|1941||65 and 8 months|
|1942||65 and 10 months|
|1955||66 and 2 months|
|1956||66 and 4 months|
|1957||66 and 6 months|
|1958||66 and 8 months|
|1959||66 and 10 months|
|1960 and later||67|
Note: If you were born on January 1 of any year, you should refer to the previous year. If you qualify for benefits as a survivor, your full retirement age may be different.
An annual limit exists on the amount of retirement benefits, regardless of preretirement income. The limit is indexed for inflation. So, for example, someone retiring at full retirement age in 2017 received no more than $2,687 monthly regardless of how high her lifetime earnings were. Someone retiring at age 70 in 2017 had a maximum monthly benefit of $3,538. (For comparison, the average monthly retirement benefit paid in 2009 was $1,328.)
You can begin receiving Social Security retirement benefits as early as age 62, and you don’t have to be retired from work to receive them. You can choose the starting date. However, note that if you begin the benefits before FRA, the amount of benefits will be reduced below the FRB. The benefit is reduced by a percentage for each month you begin benefits before FRA. The amount of the reduction depends on the year of your birth. The reduction in benefits for early retirement is a little complicated. The beneficiary loses a percentage of the full benefit for each month of the first 36 months before FRA, and a percentage of the full benefit for each additional month before FRA that benefits begin. The following table shows the reduced benefit for taking benefits at 62 for each age group.
Full Retirement and Age 62 Benefit by Year of Birth
|Year of Birth||Full (Normal) Retirement Age||Months between Age 62 and Full Retirement Age||A $1,000 Retirement Benefit Would Be Reduced to||The Retirement Benefit Is Reduced By||A $500 Spouse’s Benefit Would Be Reduced to||The Spouse’s Benefit Is Reduced By|
|1937 or earlier||65||36||$800||20.00%||$375||25.00%|
|1938||65 and 2 months||38||$791||20.83%||$370||25.83%|
|1939||65 and 4 months||40||$783||21.67%||$366||26.67%|
|1940||65 and 6 months||42||$775||22.50%||$362||27.50%|
|1941||65 and 8 months||44||$766||23.33%||$358||28.33%|
|1942||65 and 10 months||46||$758||24.17%||$354||29.17|
|1955||66 and 2 months||50||$741||25.83%||$345||30.83%|
|1956||66 and 4 months||52||$733||26.67%||$341||31.67%|
|1957||66 and 6 months||54||$725||27.50%||$337||32.50%|
|1958||66 and 8 months||56||$716||28.33%||$333||33.33%|
|1959||66 and 10 months||58||$708||29.17%||$329||34.17%|
|1960 and later||67||60||$700||30.00%||$325||35.00%|
Note: If you were born on January 1, you will be treated as if born the previous year. If you were born on the first of the month, the benefit is figured as if your birthday was in the previous month. You must be at least 62 for the entire month to receive benefits. Percentages are approximate due to rounding. The maximum benefit for the spouse is 50% of the benefit the worker would receive at full retirement age. The % reduction for the spouse should be applied after the automatic 50% reduction. Percentages are approximate due to rounding.
The law provides an incentive, known as delayed retirement credits, to delay receiving benefits after FRA. The credits are a rate of increase in your benefits for each month you postpone receiving benefits, and the rate of increase depends on the year you were born. So, your age and the number of months you delay receiving benefits determine how much benefits increase when you wait. A third factor is the salary you receive if you continue to work before receiving benefits. Because your highest 35 years of earnings are used to calculate benefits, working more years may increase your FRB if later higher-earning years push lower-earning years out of the top 35. The following table shows the rate at which FRA increases. There are no increases for delaying benefits past age 70.
How Much Will Delayed Retirement Increase My Benefits?
|Year of Birth||Yearly Rate of Increase||Monthly Rate of Increase|
|1943 or later||8%||of 1%|