by AMAC-Certified Social Security Advisor Russell Gloor
Dear Rusty: I was born in 1955, am 61 years old, and starting to think about when I should collect Social Security. I spoke to my local Social Security office and got confused when they started talking about my “full retirement age” and now I don’t know whether that’s 62, 65, 66, or something else. Can you please clarify?
Dear Confused: “Full Retirement Age,” often referred to by Social Security pundits as “FRA,” can be confusing to those approaching retirement and wondering when they should start collecting their Social Security benefits. That’s because there isn’t just one age which Social Security considers the “full retirement age”; rather each person’s full retirement age depends on which year they were born. And why is FRA so important? Because it is one of two primary factors which determine how much your personal Social Security retirement benefit will be, no matter when you start collecting. (The other is your “Average Indexed Monthly Earnings,” or “AIME,” which is the subject of a different question).
First of all, when the Social Security Administration (SSA) refers to “full retirement age,” they mean the age at which you become eligible to receive 100% of the benefit you are entitled to from your lifetime earnings record, if you were to start collecting benefits at that age. That age was fixed at 65 until 1983 when Congress changed the law to slightly increase the FRA for folks born in 1938 and later. Under current law, anyone born between 1943 and 1954 has a full retirement age of 66, while the age for those born after 1954 increases by 2 months for each year between 1955 and 1960 when the maximum age of 67 is reached. FRA then stays at 67 for anyone born after 1960.
So for Social Security purposes, your full retirement age can be anywhere from 65 to 67 depending upon the year you were born (Persons born on January 1st of any year are, for FRA purposes, considered to have been born in the previous year). For people approaching retirement today, their FRA will be 66, or 66 years and some months if they were born between 1955 and 1959, or 67 if they were born in 1960 or later. Since you were born in 1955, your full retirement age is 66 years and 2 months, and this is the age at which you will be able to collect 100% of the Social Security benefit you have earned by working over your lifetime. But if you start collecting your benefits earlier than your FRA your actual benefit will be less than 100% of what you’ve earned. And if you wait until after your full retirement age, you can collect more than 100%.
Note, too, that the significance of FRA also applies to both spousal and survivor’s benefits, in that applying early will result in a reduced benefit amount.
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