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When planning for your retirement, it’s important to understand how Social Security will work. In particular, you need to know when your full retirement age (FRA) is.
Understanding your FRA will allow you to make a fully informed decision about the right age to begin your Social Security checks and maximize your chances for a financially secure retirement.
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What is your full retirement age?
Your full retirement age is designated by law. If you claim your first Social Security check exactly at your full retirement age, you will receive your “primary insurance amount” (PIA).
Your primary insurance amount is essentially your standard benefit. It’s the amount of money you receive under the Social Security benefit formula based on average wages over the 35 years in which you earned the most money (after adjusting for wage growth). If you want to receive exactly this amount of retirement benefits, the table below shows when your full retirement age is. You must start the controls when you reach that age.
| Year of birth | full retirement age |
|---|---|
| 1943-1954 | 66 |
| 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 or later | 67 |
Table source: Social Security Administration.
Knowing when your FRA is can be very important since you don’t No you must claim benefits at this designated age. You can claim them starting at age 62 or you can wait until after your FRA. But doing so will affect the income you get from Social Security.
Here’s why you need to know your FRA
You need to know when your FRA is because you may decide to claim benefits before that age or because you may want to wait until you have passed it. But you shouldn’t make that decision until you understand how your current age, in relation to the FRA, will affect the income you earn.
Look, if you claim your Social Security checks before FRA, you will receive the following sanctions:
- A 5/9 benefit reduction of 1% per month for the first 36 months you receive a check before the FRA
- A 5/12 benefit reduction of 1% per month for any month prior to that date.
If you have an FRA of age 67, you have the opportunity to claim Social Security up to five years before that timeline by starting checks as soon as you reach the age of eligibility at age 62. However, doing so would reduce monthly benefits by 30%. , compared to your standard benefit. You don’t want to take such a big cut without knowing what’s going on and making sure you’re okay with the trade-off of getting smaller benefits but more controls over time.
On the other hand, if you claim benefits after FRA, you are rewarded with late filing credits up to age 70. These increase your benefits by 2/3 of 1% each month you wait. So your benefits could increase by up to 24% if you have an FRA of 67 and don’t get your first Social Security check until age 70.
The effect of an early or late claim can be profound. If you would have been eligible for $2,000 with an FRA at age 67, you would get only $1,400 per month if you claimed benefits at age 62. If you waited until you were 70, you would get $2,480. That’s a difference of $1,080 per month!
Before you file your Social Security claim, check to see what your FRA is, see what your benefits are at the different ages you are considering claiming, and really think about whether you are happy with your choice to file now or wait until the size increases. from your retirement checks.
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