What NY residents should know about Social Security retirement age
Millions of Americans can still claim Social Security as early as age 62, but a Senate-approved bill could soon change the names used to describe key claiming ages. The proposal would rename age 62 as the “Minimum Monthly Benefit Age,” age 67 as the “Standard Monthly Benefit Age” and age 70 as the “Maximum Monthly Benefit Age.” The ages themselves would not change.
What you need to know:
The legislation, called the Claiming Age Clarity Act, recently cleared the Senate and is headed to the president for consideration. Supporters argue the current terminology often leads Americans to believe age 67 is the “best” or “normal” age to claim benefits when claiming earlier or later can significantly change monthly payments.
“The legislation will change the official names of Social Security’s three significant retirement ages to the Minimum Monthly Benefit Age (62), the Standard Monthly Benefit Age (67), and the Maximum Monthly Benefit Age (70),” according to the Committee for a Responsible Federal Budget.
What is the Claiming Age Clarity Act?
The Claiming Age Clarity Act would rename Social Security’s key claiming ages to better reflect the benefit amounts available at each milestone. The proposal does not change when Americans can claim benefits or how much they receive.
Why does Social Security claiming age matter?
The age you choose to start benefits has a permanent impact on your monthly payment. For Americans born in 1960 or later, full retirement age is 67. Claiming at 62 results in a benefit reduction of about 30%, while waiting until age 70 increases benefits through delayed retirement credits.
Here’s an example using a worker eligible for a $2,000 monthly benefit at age 67:
-
Claim at 62: about $1,400 per month
-
Claim at 67: $2,000 per month
-
Claim at 70: about $2,480 per month
That means waiting until age 70 instead of claiming at 62 could increase monthly income by roughly $1,080, or nearly 77%, according to retirement planning data based on Social Security rules.
Can you still collect Social Security at age 62?
One of the biggest questions surrounding the proposed terminology changes is whether Americans would lose the ability to claim at age 62. The answer is no. The proposal changes only the names used to describe the claiming ages, not the eligibility ages themselves.
Workers would still be able to:
-
Claim reduced benefits beginning at age 62.
-
Receive full benefits at their full retirement age, generally 67 for people born in 1960 or later.
-
Earn delayed retirement credits by waiting until age 70.
What are the new Social Security retirement age terms?
If enacted, the bill would rename the three key milestones:
-
Age 62: Minimum Monthly Benefit Age
-
Age 67: Standard Monthly Benefit Age
-
Age 70: Maximum Monthly Benefit Age
According to the Committee for a Responsible Federal Budget, the goal is to help Americans better understand the tradeoff between claiming benefits earlier and receiving smaller monthly checks or waiting longer for larger payments.
Maria Francis is a Pennsylvania-based journalist covering trending and breaking topics across the Mid-Atlantic and Northeast regions for USA Today Network. Reach her at mfrancis@usatodayco.com.
This article originally appeared on NorthJersey.com: What NY residents should know about Social Security retirement age