The age at which American retirees can start getting Social Security benefits without having to pay a penalty has been going up every year. In 2025, this is what it looks like.
Social Security will change in a number of ways in the new year. The Social Security Administration makes a cost-of-living adjustment (COLA) every year. This adjustment affects people who receive Social Security benefits starting with the January payment.
This year’s increase was 2.5%. This will also mean that people who pay into Social Security will have to earn more to get each credit, which is also known as a “quarter of coverage.” It will also mean that people who pay wage taxes on Social Security will be able to make more. Also, winners will have to wait a little longer before they can retire fully.
It’s time to say goodbye to retirement at 66 years and 8 months: On January 1, 2025, this is the new age to retire.
You can start getting retirement funds from the Social Security Administration (SSA) as late as age 62, but your benefits will be 30% less than before. Americans who turned 66 years old and eighteen months old finally reached full retirement age in 2024.
That’s when people who get Social Security can start getting their full Old-Age payments.
They were born in 1958. People born a year later, on the other hand, will have to wait until they are 66 years and 10 months old. This means that in 2025, only people born in the first two months of 1959 will be able to get full benefits without being penalised.
People born after 1960 won’t be able to fully retire until they are 67 years old. Note: If you were born on January 1, any year, the SSA says you should use the year before.
People in the US can apply for SSA payments up to 4 months before they expect to get them. So, if you want to start getting retirement benefits soon, even if you aren’t ready yet, you should check out the SSA website on retirement benefits.
How to figure out the early retirement penalty for Social Security
Depending on how early you retire, theSocial Security Administration has a way of figuring out how much your monthly Social Security payments will be cut from the amount of main insurance you paid into over the years.
For the first 36 months, the main insurance amount will go down by 5/9 of 1%, or about 0.55 percent, for every month that a beneficiary signs up to get Social Security before reaching full retirement age.
For every month after 36 months, the discount is 5/12 of 1%, which is a little less than 0.42 percent.
If someone born after 1960 retires at age 62 in the first month they can start getting Social Security payments, they will be 60 months under full retirement age.
That means they will have to take a 30 percent permanent cut to make up for the longer time they expect to be getting monthly payments.