Planning for retirement is an important decision, and in the United States, many people start considering Social Security benefits when they turn 62.
This has traditionally been seen as the first opportunity to claim Social Security, but it may not always be the best time for everyone. While you can start receiving benefits at 62, doing so could result in permanently lower monthly payments.
Understanding the full retirement age (FRA) and the timing of your Social Security benefits is crucial to making the most out of your retirement plan.
The Full Retirement Age (FRA) Changes
In an effort to keep the Social Security system financially stable, adjustments have been made to the Full Retirement Age (FRA).
FRA is the age at which you can begin receiving full Social Security benefits without any reductions. This age has gradually increased in response to longer life expectancies.
- For people born in 1959, the FRA will be 66 years and 10 months.
- For those born in 1960 or later, the FRA will be 67 years.
These changes reflect the longer life expectancy of Americans and the need for adjustments to ensure that the Social Security trust fund remains sustainable.
It is important to note that if you choose to retire earlier than your FRA, your monthly benefits will be permanently reduced.
On the other hand, if you wait until after your FRA to start collecting benefits, your payments could increase, especially if you wait until age 70.
Social Security Retirement Age: What It Means for You
The official retirement age in the U.S. has shifted over the years, with people born between 1943 and 1954 having an FRA of 66, and those born in 1960 or later having an FRA of 67.
However, the age at which you claim benefits directly impacts the amount you will receive each month. Here are some key points to keep in mind:
- If you decide to retire at age 62, you can start receiving Social Security benefits, but they will be permanently reduced by a certain percentage.
- If you wait until your Full Retirement Age (FRA), you’ll receive the full amount of benefits.
- If you delay claiming benefits until age 70, you’ll receive higher monthly payments as your benefits increase with each year you wait.
These adjustments help ensure the sustainability of the program and help match the length of time people are collecting benefits with their life expectancy.
Meeting the Basic Requirements for Social Security
Before you can claim Social Security benefits, you need to meet some basic requirements. To qualify for Social Security, you need to have:
- Worked for at least 10 years.
- Paid taxes during that time, earning a total of 40 work credits.
You can earn up to four credits per year, depending on your income. The more you earn, the more credits you accumulate. Once you have 40 credits, you are eligible for Social Security benefits.
Impact of Continuing to Work After 62
If you decide to continue working after turning 62 and before reaching your FRA, it can affect your Social Security benefits. If you earn too much while still working, the Social Security Administration (SSA) may temporarily reduce the amount of benefits you receive.
The SSA has specific limits on how much you can earn without it impacting your monthly benefits. For 2025, the limit for people who have not yet reached FRA is $21,240. If you earn more than that, $1 in benefits will be deducted for every $2 you earn above this limit.
Once you reach your FRA, these earnings restrictions no longer apply, and you can earn as much as you want without affecting your Social Security payments.
Choosing when to start receiving Social Security benefits is one of the most important decisions you’ll make in preparing for retirement. While 62 is the earliest you can begin collecting benefits, doing so comes with a permanent reduction in monthly payments.
Understanding your Full Retirement Age (FRA) is crucial, as waiting until FRA or beyond can result in higher monthly benefits. To qualify for Social Security, you must have worked for at least 10 years and earned 40 work credits.
Additionally, if you continue working before reaching FRA, your earnings may temporarily reduce your benefits.
FAQs
What is Full Retirement Age (FRA)?
Full Retirement Age (FRA) is the age at which you can begin receiving full Social Security benefits without any reduction in payments. For those born in 1960 or later, FRA is 67.
What happens if I claim Social Security at 62?
If you claim Social Security at 62, your monthly benefits will be permanently reduced by a certain percentage. While it’s the earliest age to start receiving benefits, it comes with a permanent decrease in payments.
How can I maximize my Social Security benefits?
To maximize your benefits, consider waiting until you reach Full Retirement Age (FRA) or age 70 to claim your Social Security benefits. The longer you wait, the higher your monthly payments will be.
Do I need 40 work credits to qualify for Social Security?
Yes, to qualify for Social Security, you need to have worked for at least 10 years and earned 40 work credits. You can earn up to 4 credits per year depending on your income level.
What if I continue working after 62?
If you continue working before reaching FRA, your earnings could temporarily reduce the amount of Social Security benefits you receive. However, once you reach FRA, there are no earning limits that affect your benefits.
