Social Security undergoes certain changes every year. Many of the modifications affect both current and future retirees in important ways, including the amount of their benefits and wages subject to Social Security tax.
If you haven’t yet turned 66, though, there’s one especially important change you need to know about so you can make informed choices about your benefits. Read on to learn what it is.
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Full retirement age is changing
The big change that anyone turning 66 in 2024 or beyond must be aware of is that they’ll have a later full retirement age (FRA) than Social Security recipients who came before them. Full retirement age is the age when you can claim your standard benefit with no reduction for early filing penalties.
The law refers to birth year, but the table below shows what your FRA is based on when you turn 66.
| If You Turned/Will Turn 66 in: | Your Full Retirement Age Is: |
|---|---|
| 2009-2020 | 66 |
| 2021 | 66 and 2 months |
| 2022 | 66 and 4 months |
| 2023 | 66 and 6 months |
| 2024 | 66 and 8 months |
| 2025 | 66 and 10 months |
| 2026 and later | 67 |
Table source: Social Security Administration. Chart by author.
Unfortunately, this means that if you’ll turn 66 in 2024 or beyond, you’re going to have to expect a little bit longer than your slightly older counterparts to be able to retire with your full standard benefit with no reduction.
Understanding when your FRA is crucial to deciding when to claim benefits
It’s very important you comprehend how FRA is changing — and that you know when your FRA is. That’s because your age when you claim retirement benefits, relative to full retirement age, impacts the size of your checks for life.
If you start payments prior to FRA, a penalty applies of 5/9 of 1% for each of the first 36 months you’re early, and a penalty applies of 5/12 of 1% for each additional month you claim early. Claiming a full year ahead of arrange can result in a 6.7% reduction in benefits, while claiming at 62, with an FRA of 67, could direct to a 30% reduction in the size of your Social Security checks.
If you don’t attain you have a later FRA than your peers who turned 66 before 2024, you could end up making a mistake, claiming benefits earlier than you should. This could permanently shrink your payments.
Your later FRA also means you’ll have fewer opportunities to boost your retirement benefit by earning delayed retirement credits. Those are worth 2/3 of 1% of your benefit per month of delay and can be earned for each month you expect beyond FRA to claim, up to your 70th birthday.
Be sure to pay attention to this important change so you can carry out if you should expect to claim Social Security at 66 and eight months (or later, depending on your birth year). You don’t want to start your payments ahead of that time, only to find out later you’ve permanently reduced the monthly income Social Security will supply throughout your retirement years.
