Social Security Full Retirement Age
“I plan to retire at 65, full retirement age.” she said confidently after I asked her about her plans for retirement. She went on “that’s when Social Security says I can retire so that’s when I want to retire.” I listened intently, trying not to interrupt her train of thought and finally she paused, so I asked “Were you aware the full retirement age for Social Security has been changed?” With a less confident look on her face, she admitted “no, I was not aware.” I told her “that’s okay, most people don’t realize the ages have changed.”
Social Security is a significant part of retirement income for many Americans. For some, it makes up the majority of their income. For others, it is the “icing on the cake.” No matter your situation though, understanding Social Security is a pivotal aspect to retirement planning.
Plans are tough to form if we are not sure when they should start. So, when is full retirement age for Social Security? It depends on your year of birth. Here is a chart outlining when Social Security full retirement age is based on your year of birth:
As you can see, Social Security full retirement age was at one time age 65. Now, however, it is later depending on when you were born.
Who pulled the fast one?
Interestingly, these changes happened many years ago according to the Social Security Administration in 1983. For some reason though, people today still think their full retirement age is 65.
Why the change?
Well, Social Security over the years has morphed and changed. Adding in disability coverage as an example. Not to mention, population growth and overall health of the average American.
In fact, when Social Security was first enacted in 1934, the average life expectancy for a man was 59.3 years and for a woman was 63.3 years! So, you could claim your full benefit at 65, but most did not make it that long. Compared to today, where life expectancy is around 76 years old.
Therefore, since your average American is living well into their 70s (thank God!), people are receiving benefits longer and longer. To combat this, Congress made changes to increase the full retirement age in 1983. Bummer.. I know…
Will more changes happen?
A lot of questions come around will something happen to Social Security? This is really tough to answer. We do know that the Social Security trust fund is projecting it can pay full benefits until 2033. Let that sink in.. The Social Security funds are dependent on Congress possibly taking action like they did in 1983. Since it is further off, my gut tells me it won’t be addressed until we are closer to 2033. The reality is that no one really knows for sure how it might be addressed or if it will be addressed.
So, there you have it. With all of that said, hopefully you understand when your full retirement age is for Social Security.
Of course, you can retire whenever you want. The key is having a good plan to be prepared for both known and unknown factors that might impact you.
Sources:
Full Retirement Age, Social Security Administration. https://www.ssa.gov/benefits/retirement/planner/agereduction.html
History of Social Security, Social Security Administration: https://www.ssa.gov/history/briefhistory3.html#:~:text=The%20Social%20Security%20Act%20was,a%20continuing%20income%20after%20retirement.
Historical Life Expectancy, Berkeley. https://u.demog.berkeley.edu/~andrew/1918/figure2.html
Retirement Age Change, Social Security Administration. https://www.ssa.gov/benefits/retirement/planner/ageincrease.html#:~:text=Full%20retirement%20age%2C%20also%20called,born%20in%201938%20or%20later.
CNN (McPhillips), April 8, 2022. US Life Expectancy: https://www.cnn.com/2022/04/07/health/us-life-expectancy-drops-again-2021/index.html
Actuarial Status of the Social Security Trust Funds, Social Security Administration: https://www.ssa.gov/policy/trust-funds-summary.html
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