LegiStorm

Summary:

The Social Security full retirement age (FRA) is the age at which workers can first claim full Social Security retired - worker benefits. Among other factors, a worker’s monthly benefit amount is affected by the age at which he or she claims benefits relative to the FRA . Benefit adjustments are made based on the number of months before or after the FRA the worker claims be n efits. The a djustments are intended to provide the worker with roughly the same total lifetime benefits, regardless of when he or she claims benefits , based on average life expectancy . C laiming benefits before the FRA results in a reduction in monthly bene fits (to take into account the longer expected period of benefit receipt) ; claiming benefits after the FRA results in an increase in monthly benefits (to take into account the shorter expected period of benefit receipt ) . The FRA was 65 at the inception of Social Security in the 1930s . Under legislation enacted in 1983, the FRA is increas ing gradually from 65 to 67 over a 22 - year period (2000 - 2022) . The FRA will reach 67 for workers born in 1960 or later (i.e., for workers who become eligible for retirement benefits at age 62 in 2022) . Currently, the FRA is 66 and 4 months for workers who become eligible for retirement benefits in 2018 (i.e., workers born in 1956). Workers can claim reduced retirement ben efits as early as age 62 (the early eligibility age ). Spouses can also claim reduced retirement benefits starting at age 62 . O ther dependents, such as widow(er)s, can claim benefits at earlier ages. For workers with an FRA of 66, for example, claiming bene fits at age 62 results in a 25% reduction in monthly benefits. For worker s with an FRA of 67, claiming b enefits at age 62 result s in a 30% benefit reduction . A majority of retired - worker beneficiaries claim benefits before the FRA. In 201 6 , 39 % of new retired - worker beneficiaries were age 62; almost two - thirds (66%) were under the age of 66. Workers who delay claiming benefits until after the FRA receive a delayed retirement credit , which applies up to the age of 70 . For workers with an FRA of 66, for example, claiming benefits at age 70 results in a 32% increase in monthly benefits. For workers with an FRA of 67, claiming benefits at age 70 results in a 24% benefit increase. In 2016, almost one - fourth (23%) of new retired - worker beneficiaries were age 66 ; 11 % were over the age of 66 . S ome lawmakers have called for increasing the Social Security retirement age in response to the system’s projected financial imbalance , citing gains in life expectancy for the population overall . Other lawmakers , however, express concern that increas ing the retirement age w ould disproportionately affect certain groups within the population , citing differences in life expectancy by socioeconomic groups. Differential gains in life expectancy are important in the context of So cial Security because t he actuarial adjustments for claiming benefits before or after the full retirement age are based on average life expectanc y. P roposals to increase the retirement age are also met with concerns about the resulting hardship for certain workers , such as those in physically demanding occupations , who may be unable to work until older ages and may not qualify for Social Security disability benefits. For an in - depth discussion of potential changes in the Social Security retirement age in th e context of life expectancy trends, see CRS Report R44846, The Growing Gap in Life Expectancy by Income: Recent Evidence and Implications for the Social Security Retirement Age