As of 2023, there are approximately 59 million Americans aged 65 and older, marking a significant portion of the U.S. population typically associated with retirement. For many, turning 65 is the traditional milestone signaling the transition out of the workforce. However, when it comes to Social Security benefits, the Social Security Administration (SSA) follows a different set of rules—ones that many retirees may not be fully aware of.
Understanding how and when to claim Social Security is essential, especially as rising living costs make it harder for retirees to live comfortably on benefits alone.
SSA Supports Nearly 70 Million Americans
While most people receiving benefits from the SSA are retirees, the agency also provides financial support to:
- Individuals with disabilities (SSDI)
- Survivors (such as widows and widowers)
- Low-income individuals through Supplemental Security Income (SSI)
In total, around 69 million Americans are currently receiving some form of Social Security benefit. For many, especially retirees, these payments represent a primary or sole source of income. The average monthly payment in 2025 is just under $2,000, which can be challenging to live on given today’s economic conditions.
Cost of Living Continues to Rise
In 2025, inflation continues to erode the purchasing power of Social Security benefits. According to the U.S. Bureau of Labor Statistics, key living expenses have climbed:
- Food: +2.5%
- Rent and housing: +4.4%
- Healthcare services: +3%
These increases, combined with stagnant benefit formulas and outdated tax thresholds, are creating a financial squeeze for many seniors.
Why Social Security Benefits May Be Taxed
When Social Security benefits were first taxed in the 1980s, the policy was intended to affect only high-income retirees. However, the income thresholds that determine taxation have not been adjusted for inflation in over four decades.
As a result, nearly half of all beneficiaries now owe federal income taxes on their benefits—even though many of them do not consider themselves high earners. This outdated policy further erodes the limited monthly income many retirees rely on.
Full Retirement Age Isn’t 65 Anymore
Many assume 65 is the age you must reach to claim full Social Security retirement benefits. However, the SSA’s Full Retirement Age (FRA) is now 67 for most current and future retirees. You can still claim benefits as early as age 62, but doing so comes with reduced monthly payments—often by up to 30%.
If you delay claiming past your FRA, you can earn delayed retirement credits, which increase your monthly benefit by about 8% per year until age 70.
When Do You Receive Full or Maximum Benefits?
| Age | Benefit Status |
|---|---|
| 62 | Earliest age to claim, but with reduced benefits |
| 67 | Full Retirement Age for most (no reductions) |
| 70 | Maximum monthly benefit (after delayed credits) |
After age 70, benefits no longer increase, so there’s no financial incentive to delay claiming beyond this point.
Full Retirement Age Depends on Birth Year
The gradual shift in the FRA from 65 to 67 was enacted as part of Social Security amendments in 1983, designed to ensure the program’s financial stability. The phase-in of these changes created a sliding FRA scale depending on your year of birth.
Full Retirement Age by Birth Year:
| Year of Birth | Full Retirement Age (FRA) |
|---|---|
| 1943 – 1954 | 66 years |
| 1955 | 66 years + 2 months |
| 1956 | 66 years + 4 months |
| 1957 | 66 years + 6 months |
| 1958 | 66 years + 8 months |
| 1959 | 66 years + 10 months |
| 1960 or later | 67 years |
Understanding your personal FRA is essential in maximizing your retirement income. Delaying benefits closer to age 70 may offer significantly more monthly income, which can make a critical difference in later life.
For many older Americans, Social Security remains the bedrock of retirement income. Yet, the assumptions around claiming age, taxation, and benefit amounts can lead to financial missteps. Knowing your Full Retirement Age, understanding how benefits are taxed, and planning when to claim are essential strategies in protecting your financial health during retirement.
FAQs
Is 65 still considered the retirement age for Social Security?
Not anymore. While many still retire at 65, Full Retirement Age is 67 for anyone born in 1960 or later.
What is the earliest I can claim Social Security?
You can claim as early as age 62, but your benefits will be permanently reduced.
Why are my Social Security benefits being taxed?
Because income thresholds for taxation haven’t been adjusted since the 1980s. Many moderate-income retirees now fall into taxable brackets.