A significant change in Social Security’s Full Retirement Age (FRA) set to take effect this November will impact millions of Americans nearing retirement. This adjustment, part of ongoing modifications to Social Security regulation initiated decades ago, influences when individuals can claim their full retirement benefits and the amount they will receive each month.
Under the updated rule, individuals born in 1959 will reach their FRA at 66 years and 10 months, beginning in November 2025. This marks an increase of two months from those born in 1958, who reached their FRA at 66 years and 8 months. For those born in December 1959, the FRA will be achieved in October 2026.
The gradual increase in FRA was established by Congress in 1983, originally raising the full retirement age from 65 to 67. This means that all individuals born in 1960 or later will have an FRA of 67 years old. For those born before 1959, the FRA was set lower.
Understanding the FRA is crucial when planning for retirement, especially considering the financial implications. While individuals can start collecting benefits as early as age 62, doing so will result in reduced monthly benefits. For instance, someone born in 1959 who claims benefits at 62 would receive approximately 28% less per month compared to waiting until their FRA at 66 years and 10 months. Additionally, delaying benefits past FRA—up to age 70—can boost monthly benefits by as much as 8% for each year of delay.
While the FRA is expected to stabilize at 67, discussions in Congress regarding future increases have occurred, though no bills proposing further changes have been passed.
Social Security payments are distributed based on an individual’s birth date, with a set schedule for deposits. For those born between the 1st and 10th, payments are made on the second Wednesday; for those born between the 11th and 20th, payments occur on the third Wednesday; and for those born between the 21st and 31st, payments are issued on the fourth Wednesday of the month.
For those affected by this change, particularly those born in 1959, it’s advisable to use the SSA Retirement Age Calculator to confirm their FRA, seek guidance from a retirement advisor regarding the optimal claiming strategy, and understand how working while receiving benefits may impact the monthly amount.
As the landscape of Social Security continues to evolve, remaining informed about eligibility and payout options will be vital for effective retirement planning. With proactive measures and educated decisions, retirees can maximize their benefits and secure their financial future.