Retirement age could be increased in Social Security overhaul

Last month, a bipartisan group of legislators led by U.S. Sens. Angus King (I-Maine) and Bill Cassidy (R-La.) was reported by Semafor and MarketWatch to exploring hiking the retirement age. This comes amid calls to reform Social Security in light of the Congressional Budget Office confirming that the trust funds that pay for retirement benefits are on the road to insolvency by around 2032.

As it stands, the FRA is 67 for the majority of Americans however different rules apply for early retirees.

Currently, those in retirement are able to get Social Security payments at the age of 62, albeit at a reduced rate.

Those aged 65 and over are eligible to receive Medicare benefits if they paid Medicare taxes for at least a decade.

When someone delays accessing their retirement benefits from 67 up to the age of 70, the amount in Social Security they will get back will increase.

With concerns over the future of retirement benefits, an official increase in the FRA is being heavily considered by politicians.

Other changes being examined included changing the way monthly benefits are calculated based on a worker’s average earnings over 35 years to one based on the years spent working and paying into Social Security.

In a statement to Semafor, spokespeople for the Senators said: “This is an example of two leaders trying to find a solution to a clear and foreseeable danger

“Although the final framework is still taking shape, there are no cuts for Americans currently receiving Social Security benefits in our plan. Indeed, many will receive additional benefits.”

This sentiment has been echoed by Republicans in the House of Representatives, with Rep. Nancy Mace from South Carolina telling CNN that raising the retirement age should “be on the table”.

She explained: “We do not want to take away (from) those that are in retirement or those that are heading into retirement.

“If we’re talking about younger generations, my kids, for example, if they know what the — what the retirement will look like 40 years from now, 50 years from now, then that should be on the table, and can be.”

Earlier this month, Republican presidential candidate Nikki Haley confirmed she was in favour of raising the retirement age for Americans in their 20s.

The Social Security Administration last made changes to the retirement age almost 40 years ago and there have been no recent changes since.

As part of the Social Security Amendments of 1983, there was a rise in the retirement age which affected those retiring in 2000.

On top of this, there was a hike in the delayed retirement credit for Americans who decide to work beyond the full retirement age.

Overall, the most noticeable and drastic change was that people are unable to collect full Social Security payments until 67, an increase from 65.

Here is a full list of when the full retirement age comes into effect based on someone’s year of birth:

  • If born between 1943 and 1954, your FRA is 66
  • If born in 1955, your FRA is 66 and 2 months
  • If born in 1956, your FRA is 66 and 4 months
  • If born in 1957, your FRA is 66 and 6 months
  • If born in 1958, your FRA is 66 and 8 months
  • If born in 1959, your FRA is 66 and 10 months.
  • If born in 1960 or later, your FRA is 67 years old.

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