The full retirement age – the age at which individuals are eligible to claim their full Social Security benefit – rose to 67 this year for those who were born in 1960 (and who will turn 62 this year). From this year forward, the full retirement age will remain 67 for anyone born after 1960, barring any future changes by Congress.
Congress mandated the changes to the full retirement age in 1983 as part of a law that strengthened the program's finances. In doing so, lawmakers cited the improvements in the health of older Americans and the increased life expectancy.
Although workers can begin collecting payments when they turn 62, regardless of their full retirement age, there's a penalty for doing so: A benefit is reduced 5/9 of one percent for each month before the full retirement age, up to three years. If the number exceeds three years (or 36 months), then the benefit is further reduced 5/12 of one percent each month. For instance, if someone chose to collect Social Security at age 62, the benefit would be reduced by 30% on a monthly basis.
Here is the full retirement age for individuals based on their birth years:
1955: 66 and 2 months
1956: 66 and 4 months
1957: 66 and 6 months
1958: 66 and 8 months
1959: 66 and 10 months
Social Security recipients in 2022 received the biggest payment increase in nearly four decades, reflecting the hottest inflation since 1982.
The Social Security Administration announced last year that the cost-of-living adjustment, or COLA, will be 5.9%. That amounts to a monthly increase of $92 for the average retired person, bringing the amount to $1,657, the administration said. A typical couple's benefits would climb by $154 to $2,754 per month.
The adjustment affects about 70 million people, including Social Security recipients, disabled veterans and federal retirees. About half of seniors live in households where Social Security benefits provide at least half of their income, while roughly 25% rely on the monthly payment for nearly all of their earnings.
The increase – the steepest annual adjustment since 1982, when recipients saw a 7.4% bump – marks an abrupt end to low inflation that saw years of meager COLA increases. Over the past 12 years, the average COLA increase has been just 1.4%. In 2021, recipients received an increase of just 1.3%, or about an extra $20 a month for retirees.