This is a question, probably something obvious I’m missing.
I’ve downloaded my latest Social Security Statement. On page 2 is a handy chart “Personalized Monthly Retirement Benefits (Depending on the Age You Start)”
As I read this chart, if I start claiming SS at age 62, then I get a certain dollar amount per month. At 63, the amount goes up 6.7%. At 64, up 7.3%. And so on, each year increasing between 6.5% and almost 9%, until I reach the year of 70 with a jump iof 8.8%.
Next to the chart is the statement that my full retirement age is 67. SSA.gov tells me that “For anyone born 1960 or later, full retirement benefits are payable at age 67.”
But the way I read this chart, full retirement benefits kick in at age 70, not age 67. What am I missing?
Your full amount, your FRA is 67. You take a pay cut from that for every month you take it early. You are provide a “bonus” for every month you delay.
Think of your FRA as the number by which all other numbers (62 through 70) are calculated/determined. For each month you take it prior to 67, the reduction is 5/9ths of 1%. For every month you delay, it is increased by 2/3rds of 1%. Simple interest for both.
In other words, it isn’t your age 62 amount increasing by 6.7%, it is that your age 67 amount has decreased by 5/9th of 1% x the number of months you took it early.
You are conflating ‘maximum’ with ‘full’. Full retirement age is set by law, has legal meaning, and as you already found, is when SS considers you to be getting your full retirement benefit. Benefits before full retirement age are reduced by a different formula than they are increased by after full retirement age, not just for you, but for any surviving (ex-)spouse. For example, benefits for surviving (ex-)spouses are generally reduced if the surviving (ex-)spouse is under their full retirement age, but are not increased if the surviving (ex-)spouse is over their full retirement age. The benefits for you are decreased at a different rate before your full retirement age than the rate of increase after your full retirement age.
Additionally, if you aren’t yet collecting SS when you die, any survivor benefits are based on what you would have been collecting at your full retirement age. That means that if you die between your full retirement age and 70, but haven’t started collecting SS yet, the benefits your spouse gets won’t include additional money because you had delayed getting benefits.
I hear you, but usually the laws passed by Congress get reduced to rules written by administrative lawyers. Those usually go out for comments and approval before acceptance. Its the rules that matter. And of course interpretation of the law in writing those rules sometimes gets challenged in court.
67 is absolutely your full retirement age. The reason the SSA report shows increasing benefit amounts from age 62 through 70, is that you can delay taking social security until as late as age 70. The increasing benefit amounts by year are “designed” to pay the same lifetime benefit based upon life expectancy.
