Modern Estate Planning Blog

Takeaways

• Full Social Security Retirement Age (FRA) is 67 for those born in 1960 or later, not 65 as it once was, due to legislation adjusting for increased life expectancy.
• Claiming Social Security benefits before FRA results in permanently reduced monthly payments.
• Your plans for retirement should consider your health, work plans, and other income sources in relation to your FRA to optimize financial well-being.

In 2025, Americans born in 1960 are reaching age 65, a milestone that for decades has been associated with retirement. Many people still think of 65 as the age to claim full Social Security retirement benefits. But for those born in 1960 or later, full retirement age is no longer 65; it’s 67.

Why Full Retirement Age Matters

Full Retirement Age (FRA) is the age at which you can claim 100 percent of your Social Security retirement benefit. Claiming before that age results in a permanently reduced monthly payment. The longer you wait, up to age 70, the more you receive each month.

The FRA was originally set at 65 when Social Security was established in the 1930s. However, in 1983, Congress passed legislation to gradually raise the FRA to reflect increases in life expectancy and to help ensure the program’s long-term financial stability.

The New Retirement Timetable

Here’s how the Social Security Administration defines full retirement age based on your year of birth:

• Born 1937 or earlier: 65 years old
• Born between 1938 and 1959: FRA increases gradually from 65 years old to 66 years and 10 months
• Born 1960 or later: 67 years old

That means people born in 1960 who are turning 65 in 2025 are not yet eligible for full retirement benefits. They must wait until 2027, when they turn 67, to claim their full monthly benefit. The Social Security Administration offers a retirement age calculator to help people estimate what percentage of their retirement benefits they will get at different ages.

Claiming Early Versus Waiting

If you choose to claim Social Security benefits before reaching full retirement age, starting as early as age 62, your monthly benefit will be permanently reduced. For example, if your FRA is 67 and you claim benefits at 65, you’ll receive about 86.7 percent of your full benefit amount.

On the other hand, delaying benefits past your FRA increases your monthly payment. For each year you delay beyond 67 (up to age 70), your benefit grows by about 8 percent annually. So, if you were to wait till you turn 70 years old to start collecting your Social Security payments, your payments would be about 24 percent higher than they would have been if you had started taking payments at age 67.

What to Consider When Planning for Retirement

Knowing your full retirement age is important when planning your financial future. Some key considerations include:

• Health and life expectancy. If you expect to live well into your 80s or beyond, delaying benefits may provide more income over your lifetime.
• Work plans. If you continue to work while receiving early benefits, your Social Security payments could be temporarily reduced depending on your income.
• Other income sources. Pensions, savings, and investments can help bridge the gap if you delay claiming Social Security.

Planning for Retirement

As retirement planning becomes more complex, it’s essential to understand how your age affects your benefits. This will help you make informed choices that will affect your financial well-being for years to come. At Chubb Law Firm PC, we can help you navigate these choices and determine the best strategy for your family’s unique situation. Contact us today at 916-241-9661 to schedule a Discovery Meeting.

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