In the United States, the term "full retirement age" generally refers to the age you must reach to be eligible to receive full benefits from Social Security. Depending on when you were born, this age, also known as "normal retirement age," can vary. The Social Security Administration has been slowly increasing it as life expectancies lengthen. Any age at which you start collecting before your "full retirement age" is considered "early retirement." The youngest age at which you (or anyone) can begin collecting Social Security retirement benefits is age 62.
What difference does it make? Early retirees receive a reduced benefit. That means, if you decided to retire early by Social Security Administration (SSA) standards, the monthly payouts you receive will be lower than those of older, full-age retirees – to compensate for the fact that you're getting them sooner and will presumably be getting them for a longer period of time. There are several factors that determine the size of your reduced benefits, based on a formula used by the SSA. (Take a look at "How Much Social Security Will You Get?" to learn more.)
For individuals born prior to 1938, full retirement age is 65, while those born between 1938 and 1960 are on a graduated scale up to age 67. It is possible that the SSA might continue to raise the full retirement age as a means to cope with its solvency issues.
Social Security benefits are based on earnings averaged over most of a worker's lifetime. Your actual earnings are first adjusted or "indexed" to account for changes in average wages since the year the earnings were received. Then, the SSA calculates your average monthly indexed earnings during the 35 years in which you earned the most. They apply a formula to these earnings and arrive at your basic benefit, or "primary insurance amount" (PIA). The PIA is the amount you would receive at your full retirement age, if you are eligible, you receive benefits based on your average annual earnings during the 35 years when you made the most money.
You must also have accrued at least 40 credits, if you were born in 1929 or later, to receive Social Security. You can obtain four credits per year, meaning you must work at least a total of 10 years to become eligible for any benefits. If you have not worked enough to qualify for benefits and you are married to someone who did, you are likely to be eligible to receive a spousal benefit based on your working spouse's benefit. Your benefit, in this case, cannot exceed half of your spouse's benefit. If your own benefit amount is greater than half your spouse's, you and your spouse can collect each of your individual benefits.