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1 1 (February 9, 2023)

handle is hein.crs/govekni0001 and id is 1 raw text is: Congressional Research Service Informing the legislative debate since 1914 February 9, 2023 The Social Security Retirement Age: An Overview Introduction Social Security is a work-based federal insurance program that provides monthly cash benefits to workers and their eligible family members in the event of a worker's retirement, disability, or death. The Social Security full retirement age (FRA) is the age at which workers can first claimfull (i.e., unreduced) Social Security retired-worker benefits. (Disabled workers are subject to different rules.) Among other factors, a worker's monthly benefit amount is affected by the age at which he or she claims benefits relative to the FRA. Workers can claim Social Security retired-worker benefits as early as age 62, the early eligibility age (EEA). Workers who claim benefits before the FRA are subject to a permanent reduction in their benefits (to take into account the longer expected period of benefit receipt, also called an actuarial reduction). Workers who claim benefits after the FRA receive delayed retirement credits that result in a permanent increase in their monthly benefits (to take into account the shorter expected period of benefit receipt). The credits apply up to the age of 70. Claiming benefits after attainment of age 70 does not result in any further increase in monthly benefits. Benefit adjustments are made based on the number of months before or after the FRA the worker claims benefits. The adjustments are intended to provide the worker with roughly the same total lifetime benefits, regardless of when he or she claims benefits, based on average life expectancy. Full Retirement Age The FRA was 65 at the inception of Social Security in the 1930s. In 1983, Congress increased the FRA as part of the Social Security Amendments of 1983 (P.L. 98-21), which made major changes to Social Security's financing and benefit structure to address the system's financial imbalance at the time. Among other changes, the FRA was increased gradually from 65 to 67 for workers born from 1938 to 1960 (see Table 1). Under the scheduled increases enacted in 1983, the FRA reaches 67 for workers born in 1960 or later (i.e., those attaining age 62 in 2022 or later and age 67 in 2027 or later). The increase in the FRA, one of many provisions in the 1983 amendments designed to improve the system's financial outlook, was based on the rationale that it would reflect increases in longevity and potential improvements in the health status of workers. The 1983 amendments did not change the early eligibility age of 62; however, the increase in the FRA results in larger benefit reductions for workers who claim benefits between the age of 62 and the FRA (discussed below). Table 1. Age to Receive Full Social Security Benefits Full Retirement Age Year of Birth (FRA) 1937 or earlier 65 1938 65 and 2 months 1939 65 and 4 months 1940 65 and 6 months 1941 65 and 8 months 1942 65 and 10 months 1943-1954 66 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 1960 or later 67 Source: Social Security Administration, https://www.ssa.gov/ plan ners/retire/retirechart.html. Note: Persons born on January I of any year should refer to the previous year of birth. Actuarial Modification to Benefits: Claiming Before or After the FRA The primary insurance amount (PIA) is the benefit payable to the worker at his or her FRA. When a worker claims benefits before the FRA, there is an actuarial reduction in monthly benefits. The reduction for claiming benefits before the FRA can be sizable and it is permanent; all future monthly benefits are payable at the actuarially reduced amount. For each of the 36 months immediately preceding the FRA, the monthly rate of reduction from the full retirement benefit is five-ninths of 1%. This equals a 6%% reduction to the PIA each year. For each month earlier than three years (36 months) before the FRA, the monthly rate of reduction is five-twelfths of 1%. This equals a 5% reduction to the PIA each year. Workers who claim benefits after the FRA receive delayed retirement credits (DRC). As with the actuarial reduction for early retirement, delayed retirement credits are permanent. The DRCs have been modified over the years. Currently, the credit is an 8% increase in the PIA per year (two-thirds of 1% per month) for workers born in 1943 or later (i.e., workers who became eligible for retirement benefits or turned age 62 in 2005 or later). The maximum age at which the DRC applies is 70. Any further delay in

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