The Full Retirement Age

In the United States, the term "full retirement age"—also known as "normal retirement age"—generally refers to the age you must reach to be eligible to receive full benefits from Social Security. This age can vary depending on when you were born. The Social Security Administration (SSA) has been slowly increasing the full retirement age as life expectancy increases. Any age at which you start collecting before your "full retirement age" is considered "early retirement." The youngest age an individual can begin collecting Social Security retirement benefits is 62. As of 2019, the full retirement age was 67.

Key Takeaways

  • Social Security benefits are based on earnings averaged over most of a worker's lifetime. 
  • Full retirement age generally means the age at which you become eligible to receive full benefits from Social Security. 
  • Choosing to receive benefits before you reach full retirement age means you will receive a reduced monthly benefit. 

The Sooner You File, the Less You Get Each Month

What difference does it make? People who choose to claim benefits earlier than the full retirement age receive a reduced benefit. That means, if you decide to retire early by 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. Individuals born prior to 1938 reached full retirement age at 65. 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 of coping with its solvency issues.

The Social Security Administration has been slowly increasing the full retirement age as life expectancies lengthen.

How Earnings Are Computed

Social Security benefits are based on earnings averaged over 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. The SSA then 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 for Social Security, you receive benefits based on your average annual earnings during the 35 years when you made the most money.

Accumulating Work Credits

You must also have accrued at least 40 credits to receive Social Security benefits if you were born in 1929 or later. You accumulate credits when you work and pay Social Security taxes. 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 but are married to someone who did, you may 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.

If your spouse dies, you can receive 100% of your spouse's benefit if you have reached full retirement age. You can receive reduced survivor benefits as early as age 60.