As we enter a new year, Social Security and its full retirement age figures are also changing.

Many people regard 65 as the retirement age, although statistics show that the typical American stops working at around 62. This is the earliest age you can start receiving Social Security benefits; however, your monthly payments will be larger if you postpone claiming them.

The maximum Social Security benefits can be received if you wait until your “full retirement age.” This age has changed over time, increasing from 65 to a maximum of 67 for individuals born in 1960 or later.

This information isn’t new; the schedule for “full retirement age” was established in a law passed by Congress in 1983, which gradually raised this age from 65 to 67 over several years. Understanding this figure is crucial for those approaching retirement, considering there are 68 million Americans currently receiving benefits.

“There’s nothing automatic that changes on January 1. It’s really linked to your birthdate and thus your determined full retirement age,” explained Joel Eskovitz, senior director for Social Security and savings at the AARP Public Policy Institute, in an interview with YSL News. “Claiming before your retirement age results in decreased benefits. Each early month of claiming reduces your payment.”

When can you retire and claim Social Security?

While you can choose your retirement date based on personal circumstances, you cannot officially file for Social Security benefits until you’re at least 62.

At age 59½, you can access funds from retirement accounts like 401(k)s and IRAs without incurring a 10% penalty from the IRS.

Delaying your Social Security claim results in a higher monthly benefit. This is where “full retirement age” comes into play—it’s the point at which you receive full Social Security benefits, which varies based on your birth year.

“You can start claiming benefits at 62, but that results in a significant decrease compared to starting at 70, where benefits increase by 8% for each year you delay until you reach the maximum,” said Gal Wettstein, a senior research economist at the Center for Retirement Research at Boston College, speaking to YSL News.

If you’re 62 or older, you have the option to start receiving Social Security benefits even before retiring. However, if you’re earning over $22,320 in 2024, some of your Social Security payments may be withheld. Once you hit “full retirement age,” Social Security will reassess your benefits and credit you for any months you missed out due to work.

“Many individuals are unaware of this and mistakenly believe that money is lost permanently, but that’s not the case,” Eskovitz noted.

President-elect Donald Trump has promised to remove Social Security benefit taxes for people within specific income brackets.

How to Maximize Your Social Security Benefits?

To receive the maximum Social Security benefits, it’s best to wait until you reach your “full retirement” age. For individuals born from 1955 onward, the ages are outlined below:

• 1955: 66 years and two months
• 1956: 66 years and four months
• 1957: 66 years and six months
• 1958: 66 years and eight months
• 1959: 66 years and ten months
• 1960 and beyond: 67 years

Delaying your Social Security claim can also be advantageous. By waiting an additional year after reaching “full retirement age,” your benefits increase by 8% per year until you reach 70.

For example, if you claim Social Security at your “full retirement age” this year, your maximum benefit would be $3,822, according to the Social Security Administration. However, if you retire earlier at 62, your maximum benefit drops to $2,710. Conversely, if you wait until age 70 to claim, your maximum benefit could rise to $4,873.

Determining when to claim Social Security is ultimately a personal choice involving several factors, such as your current job, overall health, and family medical history. “AARP has a useful online resource center for Social Security,” Eskovitz mentioned. “Keep in mind that this decision is irreversible—claiming before your full retirement age means you will face a penalty that lasts your entire life. So consider this seriously.”

What is the Social Security Cost of Living Adjustment (COLA) for 2025?

To ensure that benefits keep pace with inflation, Social Security regularly adjusts benefits through a cost of living adjustment (COLA). Starting January 2025, Social Security benefits will rise by 2.5%.

This means that the average recipient will receive an additional $50 each month, increasing the estimated average monthly benefit from $1,927 to $1,976, according to the SSA. Couples receiving benefits together will see a $75 increase, bringing the estimated average to $3,089 monthly.

How critical is your full retirement age for Social Security?

Views vary, but according to Wettstein, “The key ages to remember are 62, when you first qualify for Social Security, and 70, which is when you can claim the maximum benefits.” He adds, “Every year you wait to claim benefits after 62, up until you turn 70, enhances your monthly payout.”

Many still view age 65 as a “key milestone for retirement,” Wettstein explained, since it is the age when people can begin receiving Medicare.

Is there a chance Social Security’s full retirement age will increase?

Currently, there are no rules in place to raise it, though it may be discussed in the future due to the system having a budget shortfall, as “more money is being paid out than is coming in,” Wettstein noted.

If the full retirement age were increased to, say, 68, it could potentially slow benefit payments, as future recipients might opt to “claim a full year later,” he mentioned.