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Published: May, 2001
The full benefit age at which unreduced Social Security benefits are paid is already scheduled to rise. This change was part of the 1983 law that restored financial balance to the Social Security program at that time.
Workers who retire today at age 65 receive unreduced Social Security benefits. If they had claimed benefits at age 62 (the earliest age), their benefits are permanently reduced by 20 percent. The full benefit age is now gradually rising from 65 to 66, and then later will rise from 66 to 67. Early benefits will still be available at age 62, but the reduction will be larger. The following table shows how these changes phase in.
Who Is Affected by Increases in Social Security’s Full Benefit Age?
| People born in: |
And reaching age 62 in: |
Can claim unreduced benefits at age: |
At age 62, benefits will be reduced by: |
| 1937 or earlier | 1999 or earlier | 65, 0 months | 20.0 percent |
| 1938 | 2000 | 65, 2 months | 20.8 percent |
| 1939 | 2001 | 65, 4 months | 21.7 percent |
| 1940 | 2002 | 65, 6 months | 22.5 percent |
| 1941 | 2003 | 65, 8 months | 23.3 percent |
| 1942 | 2004 | 65, 10 months | 24.2 percent |
| 1943-1954 | 2005-2016 | 66, 0 months | 25.0 percent |
| 1955 | 2017 | 66, 2 months | 25.8 percent |
| 1956 | 2018 | 66, 4 months | 26.7 percent |
| 1957 | 2019 | 66, 6 months | 27.5 percent |
| 1958 | 2020 | 66, 8 months | 28.3 percent |
| 1959 | 2021 | 66, 10 months | 29.2 percent |
| 1960 and later | 2022 and later | 67, 0 months | 30.0 percent |
Source: Social Security Bulletin, July 1983, page 30.
The early retirement reduction depends on the number of months the person actually receives benefits before the full benefit age (also called the “normal retirement age” or NRA). The reduction is: 5/9 of 1 percent for each of the first 36 months before the NRA; and 5/12 of 1 percent for each additional month before the NRA.
The benefit reduction for early retirement is permanent — it lasts for the rest of the worker’s lifetime. If, however, an early retiree does not receive a benefit for every month (because he or she goes back to work or has benefits withheld under the retirement earnings test), the permanent reduction in future benefits will be adjusted. That is, when an early retiree reaches the NRA, the reduction in benefits will be based on the number of months he or she actually received benefits.
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