The Social Security defines Full Retirement Age [FRA] as the age at which you are entitled to receive your full Social Security benefits known as Primary Insurance Amount [PIA].
Your FRA is determined by your year of birth as follows:
| Year of Birth | Full Retirement Age |
| 1943-1954 | 66 |
| 1955 | 66 and 2 months |
| 1956 | 66 and 4 months |
| 1957 | 66 and 6 months |
| 1958 | 66 and 8 months |
| 1959 | 66 and 10 months |
| 1960 and later | 67 |
You turn FRA the first of the month you turn the age shown above. For example, if you were born on February 17, 1954, you turn FRA at age 66, as of February 1, 2020. However, if you were born on the first day of the month, you are considered FRA on the first day of the previous month (i.e. born February 1, 1954, it’s as though you were born January 31, 1954 and considered FRA as of January 1, 2020).
If you start receiving your Social Security benefits prior to your FRA, you are subject to the Earnings Test. This means that your benefits will be reduced by $1 for $2 you earn as W-2 gross wages over a Social Security defined limit. This limit is $17,040 in 2018, and indexed annually.
It is also important to note that if you start receiving your benefits prior to your FRA, you will never receive your PIA. Some people think that if they start their benefits early, at 62 for example, then at their FRA age (i.e. 66 if born between 1943 – 1954), they will get a bump up in benefits to their PIA, which is not the case. The amount of benefits you start receiving is the amount you will receive (plus any annual cost of living increases) each and every month for the rest of your life, or until you get an increase in benefits due to a spousal add-on or survivor benefits.
If you delay receiving your Social Security benefits past your FRA, you will receive an increase of 8% per year, up to your age 70. So, if your FRA is 66 and you delay starting to receive your benefits until age 70, you will receive 132% of your PIA. The increase is between 0.60% and 0.70% per month, so each full month you delay starting your benefits you get this much more.
The table below shows the impact of how much of your PIA you will receive if you start receiving your Social Security benefits early or delay starting past your FRA:
| Age SS Benefits Start | % of PIA Received if FRA = 66 | % of PIA Received if FRA = 67 |
| 62 | 75.0% | 70.0% |
| 63 | 80.0% | 75.0% |
| 64 | 86.7% | 80.0% |
| 65 | 93.3% | 86.7% |
| 66 | 100% | 93.3% |
| 67 | 108% | 100% |
| 68 | 116% | 108% |
| 69 | 124% | 116% |
| 70 | 132% | 124% |
Sometimes there is a need for a higher wage earning spouse to delay starting their Social Security benefits to age 70 to provide a larger survivor benefit at their passing. For example, if Jack’s FRA is 66 but he waits until age 70 to start receiving his Social Security benefits, then his wife Jill may receive his 132% benefit at his passing. The amount of Jack’s benefit Jill will receive depends upon her FRA and the age she was when she started receiving her own benefit. If her FRA is 66 and she starting receiving her own benefit early, at age 62 for example, then she will not receive the full 132% of Jack’s amount, but 75% of his 132% (see table above). If she started her own benefit at her FRA or later, then her survivor benefits will be Jack’s full 132% (plus all cost of living increases he received).
The decision of when to start receiving your Social Security benefits is more complicated than you may think. The decisions you make at the time you file will have an impact on the benefits you, and your surviving spouse, will receive for the rest of your lives. Before you file for your Social Security benefits, I strongly suggest you consult your Financial Advisor who should be able to help you make an informed decision.
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