Impact of Potential Raise in Social Security's Full Retirement Age
Thursday, 7 March 2024, 10:02
Possible Increase in Social Security's Full Retirement Age
A well-intentioned solution could have negative consequences. Social Security is not in the best financial shape. The program gets the bulk of its funding from payroll taxes. But in the coming years, that revenue stream is expected to shrink as baby boomers exit the workforce in droves.
- You may have to work longer: It's possible to claim Social Security before reaching FRA. But if FRA is raised, you'll have to wait longer to get your full monthly benefit without a reduction. This means you may have to work longer, especially if your job is stressful or bad for your health.
- You may have less opportunity to earn delayed retirement credits: Seniors who postpone their Social Security claims past FRA currently get to accrue delayed retirement credits. If FRA is increased, today's workers will have less opportunity to grow their benefits. This means potential reduction in monthly Social Security check.
- You may be subject to an earnings-test limit for longer: If FRA is raised, workers could end up subject to an earnings-test limit for longer which could result in withheld Social Security income. This may affect your overall retirement income planning.
Lawmakers will have to weigh the pros and cons when deciding whether to push FRA to 68 or 69.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.