Retirement is a dream for many, but the age at which Americans can fully retire has been steadily rising, and it’s set to climb even higher. For the first time since Social Security’s creation 90 years ago, the full retirement age (FRA) will increase to 67 years old in 2026.
But as the retirement age shifts, there are important factors to consider when deciding when to start collecting Social Security benefits. This article breaks down what’s changing, why, and what it means for your future.
Social Security’s Full Retirement Age
The full retirement age is the age at which individuals can begin to collect their full Social Security benefits without facing any reductions.
Starting in 2026, Americans will need to be 67 years old to qualify for this full benefit, instead of the 66 that has been in place since 2007.
President Franklin D. Roosevelt introduced Social Security in 1935 to help Americans 65 and older secure a steady income after retirement.
However, over time, as life expectancy has risen, the full retirement age has been gradually increasing to ensure the program’s sustainability.
The Benefits of Waiting to Retire
While many people may want to retire as soon as they can, the age at which you choose to begin collecting Social Security can have a major impact on your monthly payments.
You can start taking Social Security benefits at 62, but doing so means a permanent reduction in your monthly payouts.
For those born in 1959 and beyond, the full retirement age will be 67. Here’s how the benefits increase depending on when you start collecting:
- Age 62: You can start taking benefits early, but they’ll be reduced. For example, if your full benefit is $1,800, starting at 62 will reduce it to around $1,350.
- Age 65: If you wait until 65, your monthly benefit will increase to about 87% of the full amount, or $1,560.
- Age 67: If you wait until your full retirement age, you’ll get the full benefit of $1,800.
- Age 70: Waiting until 70 provides the biggest benefit increase, raising your monthly payout to an estimated $2,323, or about 124% of your base benefit. After 70, the benefit no longer increases.
Why Is the Retirement Age Changing?
The decision to raise the full retirement age hasn’t happened overnight. In fact, the increase started decades ago as part of an effort to sustain Social Security.
The original Social Security Act was passed in 1935, a time when the life expectancy in the U.S. was just 61 years.
With fewer people living to retirement age, the program was sustainable at 65. However, by the time of the 1983 reforms, the situation had changed.
In 1983, Social Security was facing a crisis. The system was on the brink of collapse, as benefit payouts were exceeding income, and the number of retirees was growing faster than the number of workers contributing to the system.
At that point, Congress passed legislation to gradually increase the full retirement age. Since then, the full retirement age has been rising incrementally until it reaches 67 for those born in 1960 or later.
The Impact of Longer Life Expectancy
As life expectancy has increased over the years, so has the cost of providing benefits to retirees. Today, the average life expectancy in the U.S. is around 79 years, and this has placed significant pressure on the Social Security system.
In fact, recent data suggests that Social Security may run out of funds by 2034 if no changes are made. This means future retirees may face even greater challenges when it comes to securing a stable retirement income.
What This Means for Your Retirement Planning
The changes to Social Security’s retirement age highlight the need for proactive retirement planning. Waiting longer to collect Social Security can result in higher benefits, but it’s essential to weigh this against your personal circumstances.
If you have a shorter life expectancy or need the income sooner, taking benefits earlier may be the best choice.
Additionally, the potential financial challenges facing Social Security mean that it’s important to start saving and investing for retirement early.
Relying solely on Social Security may not be enough for a comfortable retirement, so it’s crucial to build other sources of income, such as personal savings, employer-sponsored retirement plans, and other investments.
FAQs
What is the full retirement age for Social Security in 2026?
In 2026, the full retirement age for Social Security will increase to 67 years old, the highest it has ever been. This change will affect individuals born in 1960 or later.
What happens if I retire before the full retirement age?
If you retire before your full retirement age, your Social Security benefits will be permanently reduced. For example, if you retire at 62, you may receive less than your full benefit amount.
What is the best age to start collecting Social Security benefits?
The best age to start collecting Social Security benefits depends on individual circumstances. You can start as early as 62, but waiting until 67 or 70 can increase your monthly benefits.
Why is the full retirement age increasing?
The full retirement age is increasing because Americans are living longer, and the number of workers paying into Social Security is shrinking compared to the number of retirees. This change is meant to ensure the program’s financial stability.
Can I still collect Social Security at age 65?
Yes, you can start collecting Social Security at 65, but it will not be your full benefit amount. If your full retirement age is 67, you will receive about 87% of the full benefit if you start at 65.
