Full Retirement Age Explained: Start Learning Now for a Better Future

What age is the full retirement age? And why should you be aware of its significance in retirement planning? 

Whether you are at the beginning of your career or considering delaying retirement, comprehending the meaning of full retirement age and its impact on your retirement benefits is imperative. In this article, we will explore this topic for you to make decisions easier about when to retire and how to maximize your retirement benefits.

Table of Contents

• Overview of Full Retirement Age
• How Does Full Retirement Age Impact Social Security Benefits?
• How To Maximize Your Retirement Benefits
• Key Takeaways
• Frequently Asked Questions

Overview of Full Retirement Age

When is the full retirement age for someone born in 1957? The answer is 66 years and 6 months old.

Full retirement age, also known as FRA, in the United States, is the age at which an individual is eligible to receive full retirement benefits from the Social Security Administration (SSA). 

The age varies depending on the birth year, but for those born in 1960 or later, the full retirement age is 67. For those born before 1960, the full retirement age increases by several months each year. 

How does the Full Retirement Age impact Social Security benefits?

Understanding your full retirement age is crucial for retirement planning, as it affects the amount of monthly retirement benefits you can receive from Social Security.

If a person chooses to claim Social Security retirement benefits before their FRA, their monthly benefit amount will be reduced. The reduction is calculated based on the number of months before the person reaches their FRA.

For example, if your FRA is 67 and you start claiming benefits at 62, your retirement benefit will be reduced by up to 30%. On the other hand, delaying your retirement benefits beyond full retirement age could result in an increased monthly benefit amount.

For a better understanding, you can check the following table:

Or you can use the Social Security Administration's (SSA) Retirement Age Calculator.

How To Maximize Your Retirement Benefits

By maximizing your retirement benefits, you can have more peace of mind about having enough money to live comfortably throughout your retirement years. 

Here are some suggestions for maximizing your retirement benefits:

1. Work for at least 35 years

Social Security retirement benefits are calculated based on your average earnings during your highest 35 years of work. If you have less than 35 years of work, the calculation will include years of zero wages, which can lower your benefit amount.

2. Delay claiming Social Security retirement benefits

As mentioned above, delaying Social Security retirement benefits until after reaching Full Retirement Age can result in a higher monthly benefit amount. Benefits can increase by up to 8% for each year you delay beyond your FRA until you reach the age of 70. 

3. Have Retirement Planning 

If you prepare retirement planning processes with saving options such as a 401(k) or IRA, maximize your contributions. Maximizing your contributions can increase your retirement savings and potentially reduce your taxable income.

4. Keep working

Working over your Full Retirement Age might improve your retirement savings and Social Security benefits. 

Working while receiving Social Security benefits earlier than your FRA may decrease the amount you receive due to the Retirement Earnings Test. 

However, after you achieve your FRA, your retirement benefits will no longer be reduced.

5. Plan for healthcare expenses and emergencies

Healthcare expenses and emergencies can be significant costs during retirement. To plan for healthcare costs and emergencies after retirement, keep the following points in mind:

• Understand your healthcare coverage.
• Plan for long-term care with insurance or setting aside funds to cover potential long-term care expenses.
• Build an emergency fund to cover unexpected expenses that may arise. 
• Consider a health savings account (HSA) to save for healthcare expenses during retirement.
• Take care of your health by eating healthy foods, exercising regularly, and staying up-to-date with preventative.

6. Find a financial advisor  

Maximizing your retirement benefits requires careful planning and consideration of your circumstances. Consulting with a financial advisor can help you create a retirement plan that maximizes your benefits and ensures financial security during your retirement years.

Key Takeaways 

It's never too early (or too late) to learn about the full retirement age. Understanding FRA is a crucial part of preparing for your future. Knowing when you can claim Social Security benefits and how it impacts the benefit amount can help you make informed decisions about your retirement. 

Frequently Asked Questions

More on Retirement

• Social Security Calculator
• Retirement Wishes

Ref: Social Security Administration (SSA)