The 66 years and 8 months milestone will be permanently closed on January 1, 2026, when the Social Security Administration (SSA) raises the full retirement age to 67.
The new magic number for those born after 1960 is 67. This entails bidding farewell to a long-standing regulation and welcoming a somewhat longer work period before receiving full Social Security benefits.
Congress began implementing this reform gradually decades ago with the goal of ensuring Social Security would continue to exist for future generations.
Benefits can still be claimed as early as age 62, but doing so will permanently reduce your monthly payouts by as much as 30%!
Therefore, working till age 67 might be your best option unless you have been thinking about and following the FIRE movement (Financial Independence, Retire Early) for a few decades.
Next year, the new Full Retirement Age will go into effect
As early as age 62, you are eligible to begin receiving your Social Security benefits. But it’s a quick fix that will cost you a lot of money.
So much so that you will receive a 30% reduction on your monthly checks if you choose the early bird method.
People born in 1958 commemorated more than just their birthdays in 2024. They attained full retirement age at age 66 and eight months, which allowed them to access their maximum benefits without incurring penalties.
No restrictions or deductions—just whole compensation for an entire career.
Those born in 1959 who reached the big 6-6 and 10 months milestone will formally reach full retirement this year. The catch is that only people who were born in January or February of that year are eligible for that milestone.
Full retirement begins at age 67 for all individuals born in 1960 or later. Therefore, for anyone who attended the celebration after 1959, that age becomes the new norm as of January 1, 2026.
Are you about to take advantage of your benefits? You can apply as early as four months before you want the money to start coming in, according to the SSA. Visit the SSA’s retirement page if you’re even considering it; it’s a better option than standing in line at the DMV.
How to Calculate the Penalty for Early Retirement?
Consider claiming your Social Security benefits before reaching full retirement age by clocking out early.
Uncle Sam will deduct money from your check for being too eager, but you can start doing it at age 62.
The short cut is that you will receive less money each month for the remainder of your life the earlier you begin collecting.
If you start receiving benefits before reaching full retirement age, the Social Security Administration uses a formula to determine how much your monthly check would decrease.
This deduction is determined by how early you retire in comparison to the age at which you would typically receive your entire compensation. Don’t worry, though; we’ll cut out the government jargon and explain everything in simple terms without the need for a calculator.
Let’s imagine you want to retire at age 62 but your full retirement age is 67 (as it is for everyone born in 1960 or later). It’s five years ahead of schedule.
That works out to a 30% reduction in your monthly Social Security income. Therefore, if you start collecting at age 62, you will only receive about $1,050 per month if you were expected $1,500 at age 67.
That’s a difference of almost $5,000 annually, or $450 every month.
Furthermore, the reduction isn’t short-term. On your 67th birthday, your benefits don’t just appear out of nowhere.
Starting early causes the decreased quantity to stay with you forever, much like that one email you later regret sending.
Source: eladelantado
