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Even if you end up saving money for retirement, and a nice amount of it at that, you might end up depending pretty heavily on Social Security once your time in the workforce comes to an end. And so it’s really important that you claim Social Security at the right time.
But falling victim to misinformation could lead you to claim benefits at the wrong time. And that could be disastrous for your senior years.
Know when you’re entitled to receive your monthly benefit in full
The monthly benefit you’re entitled to from Social Security will hinge on your personal wage history — specially, the amount of money you earned during your 35 most profitable years in the labor force. But that’s only part of the equation.
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Your filing age will also determine how much monthly income you’re able to get from Social Security as a retiree. So it’s important to know when you’re eligible to receive your monthly benefit in full.
Now you can first claim Social Security beginning at age 62. But you won’t be eligible for your full monthly benefit based on your earnings history until you reach full retirement age, or FRA.
Unfortunately, though, many older Americans are misguided about when FRA falls. In a recent MassMutual survey of U.S. adults aged 55 to 65, only 56% could properly identify this statement as false: “Under current Social Security law, full retirement age is 65 no matter when you were born.” To put it another way, 44% of older Americans thought it was true that 65 is FRA for everyone.
But actually, FRA hinges on your year of birth. And it hasn’t been 65 for anybody for a long time.
Granted, back in the day, when Social Security was first established, FRA was set at 65. But life expectancies have increased a lot since then, so FRA has been moved up. Now, you’ll need to consult this table to see what your FRA looks like:
| 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 |
Data source: Social Security Administration.
As mentioned, you can claim Social Security before FRA. But if you don’t want your monthly benefit reduced, then you’ll need to know what your FRA is — and make sure not to file for Social Security before then.
You should also know that you can boost your monthly Social Security benefit on a permanent basis by delaying your filing past FRA. This option stays in place until the age of 70.
To be clear, FRA — no matter what yours is — isn’t necessarily your “best” filing age. Rather, that’s something you’ll need to determine based on a host of factors, from how much retirement savings you have to whether you’re able to continue working.
But it’s crucial that you know your FRA before sitting down to decide on a filing age. So if you’re among the almost 50% of Americans who think FRA will arrive at 65, do yourself a favor and commit your actual FRA to memory so you don’t wind up regretting your filing decision after the fact.
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