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We know that people age 62 and up can claim Social Security benefits at any time. The benefits keep rising after we reach our nominal Full Retirement Age of 65 or 66 or 67. It's sort of messy to have FRA defined as different ages for different birth years, especially since the benefits continue to grow for everybody who delays claiming until age 70.
Wouldn't it be simpler to just define FRA as 70, since the potential benefits stop rising after that age for everyone?
Your statement makes sense but I think in general each Congress person wants to be elected year after year so they try and avoid tax increases and postponing collections by a few months is an easier way out.
We know that people age 62 and up can claim Social Security benefits at any time. The benefits keep rising after we reach our nominal Full Retirement Age of 65 or 66 or 67. It's sort of messy to have FRA defined as different ages for different birth years, especially since the benefits continue to grow for everybody who delays claiming until age 70.
Wouldn't it be simpler to just define FRA as 70, since the potential benefits stop rising after that age for everyone?
The reason for different FRA ages was an attempt to phase in the higher retirement age over time... so people in different phases of retirement planning wouldn't be hit with an abrupt change.
The SS reps came to my employer to give a "dog and pony" show, (when I was still working). I specifically asked what was so special about the FRA. This was during the general, public session. They couldn't explain it to where it made any sense.
I stuck around afterward and tried to pin him down. I actually asked why 62 couldn't be considered FRA and every month one delays, the monthly amount would increase. Or, why not make 70 the FRA and every month one takes SS benefits early, the amount is reduced.
Took some teeth pulling but he finally admitted to two very important things happening at FRA. (The stepped age of FRA was explained in a previous post.) From age 62 to FRA, the amount of increase in benefit amount is approximately 5 1/2 % increase per year. From FRA to age 70, the approximate yearly increase is 8%.
The other special thing about FRA is that before FRA, if one works, for every two dollars they earn in employment, SS will hold back one dollar in benefits. After FRA, the restriction is lifted and one can earn as much as they want and it won't affect what they are currently drawing in benefits.
FRA is the age for which the benefit calculation formula has been applied, it is also the level for spouses maximum benefit determination. Of course, they could modify the calculations to match any year but why?
I doubt most people can work until 70, (health, family care, layoffs, etc). It would not be a good political move to just be like well we don't care if you starve. . .
In reality full FRA is already at 70. You can still work full time and take the full amount SS per month they will ever pay you.
Saying FRA is at 65 or 66 depending on when you are born, is the politically correct thing. It makes people feel good thinking they are at their max benefits at this time, which really isn't the case.
That said, who wants to work until 70? Maybe if you have a real cushy job with very little physical activity and work from home or are your own boss and have no desire to do other things knowing your time on this earth is very limited at that point.
I may work until age 70, if my health holds up, and particularly if I can get hired for one of the more sedentary civil service jobs I've been applying for. I'm middle aged now, nearing fifty, so 20 years on the job makes for a much better pension.
Should I have to remain on my current job, which is a physically demanding position in the private sector without a pension, I'd be sorely tempted to file much earlier, perhaps even at 62. We are not guaranteed longevity, and statistically receiving a reduced benefit for more years should roughly equal receiving a higher benefit for fewer years. The exception is if you live into your late 80s or 90s. I don't expect to live that long. Maybe I will, and I try to take care of myself, but I don't think that's a likely result.
I may work until age 70, if my health holds up, and particularly if I can get hired for one of the more sedentary civil service jobs I've been applying for. I'm middle aged now, nearing fifty, so 20 years on the job makes for a much better pension.
Should I have to remain on my current job, which is a physically demanding position in the private sector without a pension, I'd be sorely tempted to file much earlier, perhaps even at 62. We are not guaranteed longevity, and statistically receiving a reduced benefit for more years should roughly equal receiving a higher benefit for fewer years. The exception is if you live into your late 80s or 90s. I don't expect to live that long. Maybe I will, and I try to take care of myself, but I don't think that's a likely result.
Add to that, that even if you live into your late 80s or 90s your quality of life will be no where near what it was at 62. I've never met anyone that can claim at age 88 they are as physically active and mobile, mentally sharp, and without daily sometimes serious aches and pains they never experienced at 62. Many if not most can no longer drive or even go up 2-3 sets of stairs without help.
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