The full retirement age for Social Security has been officially raised to 67 years old, which means that millions of Americans who are planning to retire will have to make significant adjustments to their financial planning beginning this year. Beginning in the 1980s, this modification marks the conclusion of a process that was carried out in stages.
The point at which beneficiaries are eligible to receive one hundred percent of their monthly Social Security payments is referred to as the full retirement age (FRA). In the past, this age was set at 65; however, as time has progressed and the average life expectancy of the population has increased, Congress made the decision to change it in order to ensure that the system will continue to function effectively.
The FRA has been gradually adjusted according to the year of birth as a result of a reform that was passed in 1983. This increase is being implemented as part of that reform. As of right now, the new full age is 67 for people who were born in 1960 or later.
Why has the age of retirement for Social Security been raised to 67?
The age at which people are eligible to retire has been adjusted as a result of social and political factors that have a direct impact on things. A significant one of these is the rise in the average lifespan, which has reached 80 years in the present day. Due to the fact that the life expectancy at the time this plan was developed in 1935 was 61 years, the authorities realized that they would continue to receive benefits for a considerable amount of time.
The retirement program is under a significant amount of financial pressure, which is another important factor. Taxes are the primary source of funding for Social Security, and the lower the number of people who are employed, the higher the amount of money they receive from Social Security. This creates an inconsistency in the plan, which needs to be balanced.
How can you determine when you are about to retire?
The Social Security Administration provides users with an online tool that allows them to check their full retirement age as well as the estimated amounts that they would receive in a variety of different types of situations. The official tool, which can be found at ssa.gov/retirement/ageincrease.html, provides evidence of this.
What happens if you decide to retire earlier?
In the event that you choose to retire prior to reaching the age of 67, your monthly payment will get reduced. In the event that you make a claim at the age of 65, for instance, you will only receive approximately 86.7% of the total benefit to which you would be entitled at the age of 67. On the other hand, if you wait until you are older than 67 years old to submit your application, until you reach the age of 70, your benefits will increase by 8% for each additional year.
