If you have in mind to process your retirement soon, it is advisable to make the corresponding calculations. A law passed in the 1980s gradually increased the age at which you can access full Social Security benefits. What is this regulation about? Now we explain it in detail and tell you how this law will affect retirement in 2025.
Details of this regulation
In 1983, Congress passed a law that gradually increased the age at which people could receive 100% of Social Security benefits. This raised the minimum age from 65 to 67, a change that was felt in the following decades as Americans approached retirement age. Such an increase was intended to match increasing life expectancy.
According to the Social Security Administration, full retirement age is when you qualify for full benefits. That is, there is no reduction by the SSA. The year and month you reach full retirement age depends on the year you were born.
For example, those born in 1959 will begin to enter the age at which they will be able to claim full retirement benefits in 2025 under this law. Most Americans consider the typical retirement age to be 65 because that was the requirement for most of history. However, this law changed everything.
Progressive changes in retirement age
Now, beginning in 1938, there was a progressive increase of two months for each subsequent year of birth until those born in 1969 or later. For example:
- If you were born in 1957, you would have reached your full retirement age (and be eligible to collect full Social Security benefits) when you turned 66 years and 6 months.
- If you were born in 1958, you must be 66 years and 8 months old to claim full benefits.
- For those born in 1960 and later, the full retirement age is currently set at 67.
Early Retirement and Compensation for Delayed Retirement
Social Security beneficiaries have the option to apply for benefits before the full retirement age designated by this law. You may also begin collecting as soon as you reach age 62. However, in this case, there will be a substantial reduction of approximately 25% if your full retirement age is 66 and 30% if it is 67.
On the other hand, if workers wait until age 70 to begin receiving benefits, the Social Security Administration will reward them. In this case, the monthly amount is much higher than in the previous cases.
To find out when you will be able to claim full retirement benefits, or what you can get if you retire early, the most recommended thing to do is to use the Social Security online calculator. This is a very useful tool to clear up doubts and find out your specific situation.
Good news for retirees
Social Security has some very good news for all U.S. citizens collecting retirement benefits. As reported, there will be a 2.5% cost-of-living increase (COLA). And while this may seem modest and less than last year, it represents a relief for millions of retirees and people with disabilities who depend on these payments to cover their basic household needs.
It should be noted that these readjustments are made to compensate for the impact of inflation. This ensures that beneficiaries do not lose purchasing power in the midst of this complicated economic scenario.
