Starting 2026, millions of Americans who are making retirement plans will be impacted by the increase in FRA for Social Security payments to 67. Those who decide to retire early at age 62 may see a 30% decrease in their monthly benefits. Reforms enacted by former President Ronald Reagan in 1983 to address the Social Security system’s long-term financial issues are what led to the shift.
President Franklin D. Roosevelt introduced the first Social Security Act in 1935, which initially set the retirement age at 65. Since 1991, there has been a steady increase in the FRA of two months annually and for those who turn 65 in 2026 and beyond, it is raised to 67 from 66 in 1996.
Social Security’s New Retirement Age
For the time being at least, Social Security’s full retirement age (FRA) has formally ceased increasing. Now, for those born in 1960 or after, that figure is 67, according to the Social Security Administration (SSA). That age is now set for Americans who are getting close to retirement unless Congress changes its mind later. A decades-long process comes to an end with one last change.
The retirement age was gradually raised from 65 to 67 beginning with the 1983 amendments. First, this change affects all those born in 1960, therefore if you were born in 1959, your FRA is 66 years and 10 months. In November 2025, some persons will formally receive their F.R.A and new retirees will be eligible to collect their full benefits at age 67.
Why the retirement age is increasing?
- Life expectancy in America was just 61 at the time the Social Security Act was founded but today, it is at 79, having increased to above 74 by 1983. The system is under more strain now than it was in 1955 when there were 8.6 employees supporting each retiree, but that figure has decreased from 2.8 in 2013.
- Addressing these demographic changes and extending the program’s viability were the goals of the 1983 amendment. As they are in need of money, have health problems, or are worried about future cuts, many Americans apply for benefits around age 62, however doing so results in permanently reduced monthly payments.
- According to the Social Security Administration (SSA), delaying retirement until age 70 can result in a large rise in monthly payouts, while claiming benefits before age 62 might result in a drop of up to 30%.
- Only until 2034 will the Social Security Trust Funds generate enough income to provide full payments, according to a new study from the Social Security Board of Trustees. Only 81 percent of planned benefits would be payable after that if Congress did nothing and so the avg. monthly check may drop from $1,976 to around $1,600.
- Trust fund reserves dropped $67 billion to $2.72 trillion in 2024 as program expenses kept rising beyond revenue. Since 2010, the finances have been in deficit, which raises questions about social security’s long-term viability.
Taking benefits early comes with deeper cuts- Waiting still pays
You can begin applying for Social Security at age 62, but doing so will permanently reduce your monthly benefit. For example, if they file at age 62, individuals born in 1960 would have a 30% decrease, which is somewhat greater than the 29.17% reduction for those born in 1959. If your full benefit at age 67 would have been $1,800, then claiming at age 62 reduces that amount to around $1,260. And that reduced form remains for life.
Delay retirement credits can be earned if you wait to collect your benefits after your FRA. Your check increases by around 8% annually as a result. Waiting until age 70 might increase the $1,800 monthly payment to $2,232. The SSA, however, is clear that waiting over 70 doesn’t help. After that age, there are no more benefits.
Early or Delayed Benefits
Social Security is still available to Americans as early as age 62, but there is a cost to it. The monthly payment paid to early claimants is around 30% less than what they would have received at age 65, now 67. As early as age 62, you can begin earning your Social Security retirement payments.
Your payments will be lowered by a small amount for each month prior to reaching full retirement age if you begin receiving benefits early. However, you won’t be eligible for full benefits until you’re old enough to retire. Your benefit amount will rise if you wait until you are 70 years old to begin receiving your benefits after reaching full retirement age.
The latest guideline from the Social Security Administration describes these differences: If a person claims at age 62, they will only receive $700 per month, even if they are qualified for a $1,000 monthly payment at age 67. Delaying three years past the FRA would raise that monthly income by 24 percent, to $1,240, if they waited until they were 70 years old.
Most Americans will probably find life difficult as a result of this new rule. By 2025, about 4 million Americans are predicted to be over 65. A assessment from Social Security actuaries projects a shortfall in retirement payments, with the trust fund perhaps depleted by 2033, reducing the system’s capacity to pay 77% of projected benefits.
Deciding the Age For Benefits
The decision to when to begin receiving retirement benefits is a big one as these benefits take the place of part of an employee’s pre-retirement earnings. From 78% for extremely low incomes to around 42% for moderate earners and roughly 28% for high earners, the percentage changes if you begin collecting benefits at age 67. You will see lower percentages if you begin collecting benefits before the age of 67. After the age of 67, they would have increased.
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