In the United States, retirement age is one of the most important things to think about when looking at Social Security benefits. People who want to retire must meet certain requirements and reach a certain age in order to get retirement benefits.
Because of this, any change in the country’s full retirement age will have an effect on millions of people, since beneficiaries will have to wait longer to apply for their monthly benefits if the retirement age goes up.
At the moment, the full retirement age (FRA) is 67 years old. However, some beneficiaries can retire earlier if they are at least 62 years old. It is important to know that people will get less money from Social Security each month if they decide to retire earlier.
Social Security has announced that everything will change with the US retirement age next year
According to financial expert Michael Ryan, the full retirement age for many seniors will go up in 2025. This is because people are living longer and Social Security is having money problems.
According to the rules, people born between 1943 and 1954 will be able to retire at age 66 next year. People born after that will have to wait a little longer. For the same reason, babies born in 1956 will be 66 years and 4 months old, and babies born in 1955 will be 66 years and 2 months old.
Also, people born in 1957 will be able to retire at full retirement age of 66 years and six months. People born in 1958 will be able to retire at full retirement age of 66 years and eight months.
The full retirement age for people born in 1960 is 67, while the full retirement age for people born in 1959 is 66 and a half months.
Alex Beene, a teacher of financial literacy at the University of Tennessee at Martin, says that seniors who start getting Social Security benefits before they turn 67 will get less money.
This does not mean they will not be able to do it, though. People born between the first four months of 1958 and the second half of 1957 can now reach full retirement age in 2024 thanks to changes to the rules. People born in the last eight months of 1958 will reach the full retirement age by 2025.
People born in the first two months of 1959 will reach the full retirement age by the end of the year.
Beene also said that the people who will be affected by these changes probably will not notice big changes. The full retirement age is going up, but it is only going up very slowly—by a few months at a time.
Social Security benefits will increase next year due to the cost of living adjustment
If you wait to start collecting Social Security until after your full retirement age, your benefits will go up every year until you turn 70. But if you start collecting before your full retirement age, you will not get a full payment.
Once the cost-of-living adjustment is changed to 2.5%, the average monthly payment will go up from $1,927 to $1,976 in 2025.
Also, early retirees can earn up to $23,400 a year before their benefits are cut, while people who have reached full retirement age can earn up to $62,160 a year. Lastly, the highest amount of income that will be taxed by Social Security will go up from $160,200 to $176,100.
Congress is still debating whether to raise the full retirement age even more, to 68 or 70. This is because the program’s funding problem is coming up soon and people are living longer.
Supporters say that encouraging people to stay in the workforce longer and lowering lifetime benefit payments will make the program more financially stable, Ryan said. But what about people who do not have long life spans or who have jobs that are hard on their bodies?
