Maximum Social Security Benefits to Change Once Again
So, there is good news and bad news. The bad news is that Social Security raised its maximum full retirement age to 67. The good news is it’s not likely to change again for some time. For those born after 1960, your maximum Social Security benefit is now reached at 67 years old.
In 1983, there was a Social Security amendment that made a plan for the full retirement age to reach 67 over the course of 20 years. From 2000-2022, the age gradually rose from 65 to 67, with the cycle now resting at 67 for all future recipients. According to some sources, this “bump in age” can be credited to improvements in the overall health of seniors in America and an increase in life expectancy. So, what can you expect now?
Maximum Social Security Benefit Changes and Consistencies
Americans Can Still Collect Earlier
At this time, eligible individuals can still collect Social Security benefits as early as 62, but there will be penalties that come with it. If you take out your Social Security early, the benefit is reduced by nearly half, 5/9ths of 1% for each month before your full retirement age, to be precise. This applies to a maximum of three years (or 36 months). Should your needs surpass three years, then your benefit is further reduced by 5/12ths of 1% for each month thereafter.
The difference can be significant. For an individual choosing to – or more likely, being forced into retirement due to a medical issue – retire at 62, the maximum Social Security you will be able to collect is $2,364. Should that same person wait for their maximum retirement age at 70, they will receive full benefits and be eligible for a maximum of $4,194.
Gauging Life Expectancy
There are a few instances where collecting your Social Security benefits early makes sense. Unfortunately or fortunately, there is no way to know how long you will live. Due to this fact, there is no real way to know if taking Social Security later will really pay off. If you are healthy, in your 60s, and you have longevity in your family, then it may make a lot of sense to hold off on collecting and start at 70. However, if your health is poor in your 60s, you may want to consider taking your benefits earlier.
If you are on the cusp and wondering if you are healthy enough to hold out, there is some good news. You can always improve your health.
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