Many Americans know that turning 65 is a milestone not just because it’s an important birthday but it’s when most Americans plan to start collecting their Social Security benefits.
But hold that thought!
Did you know that depending on the year you were born, the age to collect full Social Security benefits is moving from age 65 to age 67 and it may go even higher?
Social Security and Retirement Ages…A Hot Button Topic
If you’ve been watching the news recently, you’ve likely seen the protests in France over laws upping the retirement age there from 62 to 64 so one can only imagine the impact here in the U.S. as our full retirement age moves from 65 to 67.
Social Security is a critical part of retirement planning for many Americans, providing a source of income for those who have paid into the system during their working years. CNBC shared that most Americans had hoped to retire at age 62 but it’s looking like that might not be the reality. Social Security is typically one part of a retirement plan along with employer-sponsored retirement plans, IRAs or other retirement accounts and being diligent with saving.
The Social Security Administration lets you start claiming benefits as soon as you turn 62 but if you start collecting benefits at this age, you won’t get your full benefit amount. To get that, you have to wait until you reach your full retirement age which is based on the year you were born. Click here to understand your full retirement age.
Retirement ages were last altered in 1983 under then-President Ronald Reagan which raised the full retirement age to 67 from 65 and are still being phased in today. The 1983 Amendments phased in a gradual increase in the age for collecting full Social Security retirement benefits. The retirement age will increase from 65 to 67 over a 22-year period, with an 11-year hiatus at which the retirement age will remain at 66.
Recently, the House of Representatives approved a retirement bill that would push out the age for required minimum distributions on certain savings accounts to 75, up from the current age of 72. That change, if it passes the Senate, would be gradually phased in by 2032.
Bottom Line Takeaway
Everything depends on the year you were born but those impacted by these changes are for those born in 1960 or later. This cohort will have age 67 instead of age 65 as their full retirement benefits age.
So, what does this change mean for future retirees? For those who are planning to retire in the coming years, it means that they may need to adjust their retirement plans to account for the fact that they will need to wait longer to begin collecting Social Security benefits. This could mean working longer, saving more, or adjusting their lifestyle to account for the delay in benefits.
People are generally healthier and living longer so not outliving your money is the key.
Want to learn more about collecting Social Security? Read our blog post 6 Myths About Social Security
We’re here for you!
Bankers Life is here to help customers with their financial and insurance needs so please visit us at BankersLife.com to learn more.