The Social Security Administration (SSA) has confirmed a change in the full retirement age, which will affect individuals born in 1960 or later. The new full retirement age for these individuals will be 67, a painful shift from the conventional retirement age of 65. According to the SSA, the United States has a population of 59 million adults over 65.
Many of these individuals rely on Social Security benefits as their primary source of income. However, the average Social Security payment is just under $2,000 per month, which can be challenging for retirees facing rising cost-of-living prices, including substantial increases in food, rent, housing, and healthcare costs. While the minimum age to claim retirement income remains 62, the SSA encourages individuals to wait until they reach the full retirement age by increasing benefits for those who delay claiming.
By delaying claiming benefits past age 67, benefits will increase by 8% annually until age 70. No additional benefit accrues past age 70.
SSA changes full retirement age
The full retirement age differs depending on the birth year due to gradual changes implemented to address funding concerns. For those born between 1943 and 1954, the full retirement age is 66. Individuals born in 1955 have a full retirement age of 66 years and two months, while those born in 1956 have a full retirement age of 66 years and four months.
The full retirement age increases incrementally until reaching 67 for those born in 1960 or later. Critics argue that taxing Social Security benefits is unjust, as it was initially intended for top earners. The income limits and thresholds determining federal tax liability on benefits have not changed in over forty years, meaning what was once considered a high payment is now much less significant.
By understanding these changes and planning accordingly, individuals can better manage their retirement strategies and maximize their Social Security benefits. Those approaching retirement age need to stay informed about the latest developments in Social Security to ensure a secure financial future.
