SSA Confirms Retirement Age Hike: Find Out the New Full Retirement Age Now!

In 2023, the United States is home to approximately 59 million adults aged 65 and older, which is often considered the typical age for retirement. Many of these older adults receive Social Security benefits provided by the Social Security Administration (SSA). Despite the common perception, the actual retirement age according to SSA differs from the age most people assume.

Supporting a Diverse Group of Nearly 70 Million Beneficiaries

Although retired individuals make up the majority of those who receive benefits, the SSA also aids disabled people, those with minimal or no income or resources, and surviving family members of deceased workers. This year, close to 69 million people are benefitting from Social Security. For many, this benefit is the primary or sole source of income during their retirement years. A pressing issue, however, is that the average monthly Social Security benefit is just below $2,000, which may not suffice for a comfortable retirement.

Another challenge is that nearly half of these beneficiaries are required to pay federal income tax on their Social Security income. Critics argue that the original intent was to tax only the highest earners, but the thresholds for taxation haven’t been adjusted in over four decades. What was once a substantial income is now considered average, failing to keep up with inflation and increasing living costs.

“According to the U.S. Bureau of Labor Statistics, so far this year, food prices have increased 2.5%, rent and housing costs have climbed 4.4%, and health care services have increased by nearly 3%,” reports Kelley Taylor from Kiplinger.

Adjusting the Age for Retirement Benefits

While the earliest age to claim retirement benefits is 62, the SSA incentivizes delaying claims to increase the benefits amount. By waiting until the Full Retirement Age (FRA), retirees can maximize their benefits. Contrary to popular belief, the FRA is not 65 but rather 67. If you postpone claiming past the age of 67, your benefits will increase by 8% annually until you reach 70, after which no additional benefits are accrued. Claiming at 67 ensures you receive full benefits without any reduction.

Varying Full Retirement Ages Based on Birth Year

The FRA actually varies depending on the year you were born. For those born in 1960 or later, the FRA is 67. This adjustment was made in 1983 to gradually implement changes due to funding challenges. For individuals born between 1943 and 1954, the FRA is 66. It increases in two-month increments for each subsequent year: 66 and two months for those born in 1955, 66 and four months for 1956, and so on, up to 66 and ten months for those born in 1959. Maximizing your benefits by delaying claims until you’re 70 can significantly increase your retirement income.