Younger Americans will now have to wait longer to collect full Social Security benefits, as the U.S. government officially raises the retirement age for certain birth years in line with a decades-old federal law. The adjustment is rooted in a 1983 law that allows the government to shift the retirement age based on increasing life expectancy.
Traditionally, the standard retirement age was 65, but recent changes mean that age is slowly being pushed upward. Starting this year, the changes will affect individuals born in 1959, with their Full Retirement Age (FRA) now set at 66 years and 10 months. Those born in 1958 already face a retirement age of 66 years and 8 months, while individuals born in 1960 or later will need to wait until they are 67 to receive full benefits.
More: Texas Cafeteria Worker Allegedly Had Daily Sex with Student in School Closet
More: Arizona Father in Toddler’s Hot-Car Death Granted Court Approval for Hawaii Vacation with Family
Social Security payments are calculated monthly based on a person’s earnings throughout their working life. While benefits can be claimed as early as age 62, doing so comes at a significant cost. According to the Social Security Administration (SSA), claiming benefits before reaching FRA can result in a permanent reduction of up to 30% in monthly payments, as told The Mirror US.
On the other hand, those who delay collecting benefits beyond their FRA can see substantial increases. The SSA offers an 8% boost for each year an individual delays claiming past their FRA, up to age 70, potentially raising monthly benefits by up to 32%.
“Waiting until 70 certainly has its benefits: a higher initial monthly payment, which means greater cost-of-living (inflation) adjustments… and one that people may overlook is higher survivor benefits for the surviving spouse,” said Stephanie McCullough, founder and financial planner at Sofia Financial.
More: 41-Year-Old Nebraska Mother and 2 Kids Allegedly Killed by Husband in Murder-Suicide Just Hours Before Son’s Graduation
More: One Day Before Mother’s Day: 12-Year-Old Shot to Death While Filming Music Video
“Even if the higher-earner in a couple may not live terribly long, their benefit amount will determine how much the widow(er) receives for the remainder of their life, which can have a big impact over the years.” McCullough also advises Americans to carefully manage their expenses as they approach retirement.
“One of the most helpful things all of us can do… is to try to keep our fixed expenses as low as we can. Those hard-to-change, repeated regular costs like housing, car payments, utilities, and monthly bills,” she said. “If you keep those fixed costs low, you have more room for discretionary fun stuff, as well as to adjust to any exogenous shocks life throws at you.” Understanding your Full Retirement Age and planning strategically could make the difference between financial strain and comfort in your retirement years.
You Might Also Like:
- 31-Year-Old Man Allegedly Kills Mother and Hides Body Under McDonald’s Wrappers
- Amal Reportedly ‘At Her Wits’ End’ as George Clooney Refuses to Leave New York
- White House Press Secretary Criticized for Photo Featuring Infant Son at Desk
- Cheryl Cole is reportedly delaying inheritance for her son
- Bad News for Future Retirees: Social Security Age Raised Again — Here’s How Much You Could Lose if You Retire Early