Key Takeaways:
• Full retirement age (FRA) is the age at which you can claim 100% of your earned Social Security benefit.
• FRA varies depending on the year you were born. It is 66 for many older retirees and goes up to 67 for people born in 1960 or later.
• Filing earlier reduces your monthly benefit, and filing later increases it until age 70 through delayed retirement credits (DRCs).
Employment offers a steady paycheck, and maintaining that income after retirement is possible for individuals who plan carefully.
With Social Security, full retirement age (FRA) is a key factor in determining the amount you receive each month. FRA is the age when the Social Security Administration allows retirees to claim their full benefit (based on earnings history).
You can file earlier or later if you wish, but either choice will affect how much you bring in. In this guide, you’ll learn about what full retirement age is, how filing timelines affect your benefit amount, the earnings test, spousal benefits, what American Hartford Gold can offer you, and much more.
What Does Full Retirement Age Mean?
Full retirement age (FRA) is the age when Social Security pays your full benefit. The benefit amount is based on your highest 35 years of covered earnings, adjusted for inflation, and then run through a formula that replaces a portion of your average earnings.
FRA does not change how your benefit is calculated, but it does determine whether you receive the full amount, a reduced amount, or a higher amount. An early claim means a lower benefit, a later claim means a higher one.
FRA is based on your birth year. For those born from 1943 to 1954, FRA is 66. It increases by two months per birth year for those born from 1955 through 1959, and it is 67 for anyone born in 1960 or later. Since FRA can vary, two spouses might have different FRAs, even if they are close in age.
Some confuse FRA with “retirement age” in the general sense. You can retire from your job at any age. Social Security’s FRA is only used to dictate how much you are entitled to receive and when.
How Can Filing Time Affect Your Benefit?
If you claim before FRA, Social Security reduces your benefit for each month you file early. The earliest you can file for retirement benefits is age 62, and the reduction can be significant if your FRA is 67.
If you wait until after FRA, Social Security provides delayed retirement credits (DRCs) for each month you hold off, which increases your benefit until age 70.
Waiting past 70 does not equal more credits. The program aims to pay roughly similar lifetime totals whether you claim early for more years at a lower rate or later for fewer years at a higher rate.
What Is the Earnings Test?
Many people maintain some form of employment in their 60s. If you plan to work and claim benefits before you reach FRA, the earnings test will be relevant to you. The earnings test sets an annual threshold, and if your wages or self-employment income exceed that threshold, Social Security might temporarily withhold some benefits.
The test is less strict in the months leading up to FRA, and it ends entirely in the month you reach FRA. The earnings test does not apply to pensions, investment income, or withdrawals from retirement accounts. It focuses solely on employment wages.
What Happens When You Reach FRA?
Withheld benefits are not forfeited forever — the deduction is temporary. When you reach FRA, Social Security reviews the months your checks were withheld and reimburses you, in a sense, to reflect those months.
That adjustment does not mail you a check for prior months. It simply increases your monthly payout moving forward. Since the earnings test no longer applies at FRA, from that point, you can work and claim benefits without being subject to withholding.
If you waited until FRA to file, you begin with your full amount. If you waited until after FRA, delayed retirement credits (DRCs) will help supplement your benefit until you file or turn 70, whichever comes first.
What To Know About Spousal, Survivor, and Divorce Rules
Spousal benefits, survivor benefits, and certain benefits for some divorced spouses all use FRA as a determining factor. A spousal benefit can pay up to half of the higher earner’s FRA amount, but only when the spouse’s own benefit is smaller. Filing the spousal benefit before your own FRA reduces it. Filing at or after your FRA preserves the full spousal amount you qualify for.
Survivor benefits use a different formula. A surviving spouse can receive up to the amount the deceased spouse was receiving, or was entitled to receive, adjusted slightly to account for the survivor’s filing age. Filing for a survivor benefit before the survivor’s FRA reduces it, while filing at or after it can entitle the surviving spouse to the full amount.
Since the survivor benefit is tied to what the deceased had or could have had, a higher earner’s decision to delay could increase the surviving spouse’s income down the line. Divorced spouses can qualify for spousal or survivor benefits if the marriage lasted for a minimum of 10 years and certain conditions are met.
For an ex-spouse, remarriage and the timing of claims can affect eligibility. The amount available for a divorced spouse to claim does not reduce what their former partner or current spouse is eligible to receive.
Ages and Records
Since FRAs can vary from person to person, it can lead to a staggered schedule. One spouse may reach FRA a year earlier and claim benefits, while the other waits. Another couple might opt to claim both checks at FRA.
Every household is different, and every individual has their own unique set of needs, so there is no one-size-fits-all approach. If you are wondering about survivor benefits, take a look at the higher earner’s situation first.
A late claim for the higher earner can protect the household from a dip in income if one spouse passes away. If you are looking to generate short-term cash flow, consider whether the lower earner’s early claim can fill the financial gap before both spouses reach FRA.
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Full retirement age (FRA) helps determine how much you can claim (and when) under your Social Security plan. FRA varies based on birth year, so a couple could have two different FRAs. Careful planning helps individuals and spouses lay the foundation that will help support them financially after they stop working.
When it comes to retirement, American Hartford Gold helps clients understand how a precious metal, like gold, could fit into their long-term plan. Our Gold IRA, for example, can help you protect the value of your savings. Connect with us today.
FAQs
Is full retirement age the same for everyone?
No. FRA is based on your birth year. For those born from 1943 to 1954, FRA is 66. It increases by two months per birth year for those born from 1955 through 1959, and it is 67 for anyone born in 1960 or later. Since FRA varies, two spouses can have different FRAs, even if they are close in age.
Can I work and collect Social Security before FRA?
Yes, but the earnings test can temporarily withhold your benefits if your employment income exceeds annual limits. The months that were withheld are credited back to you when you reach FRA, which effectively increases your monthly benefit going forward.
The earnings test no longer applies the month you reach FRA, so from that point, you can work and claim benefits without being subject to withholding.
Does waiting past FRA always make sense?
Waiting increases the monthly benefit amount until age 70, which can help with stability and survivor protection. However, this decision doesn’t align with every household since everyone has different budgets, health situations, and life plans.
How does FRA affect spousal or survivor benefits?
Spousal benefits are based on a portion of the higher earner’s FRA amount and are reduced if the spouse files before reaching their own FRA. Survivor benefits can pay up to the amount the deceased spouse was receiving, or could have received, and filing age matters for the survivor’s amount. FRA plays a key role in both calculations.
Sources:
Benefits Planner: Retirement | Delayed Retirement Credits | SSA
Program Explainer: Retirement Earnings Test | SSA
What you could get from Survivor benefits | SSA
