Full Retirement Age is a term used by the IRS to arbitrate how much employees receive when they retire, that is whether an employee will receive full benefits or not. Another term used by the IRS for Full Retirement Age is Normal Retirement Age. Most Americans generally feel that the retirement age is 65.
For about 50 years the retirement age in USA was 65, however, amendments made to the Social Security Act in 1983 changed retirement ages according to what year you were born. If you retire before the retirement age for the year you were born, you will receive fewer benefits. On the other hand, if you retire after the age of retirement for the year you were born, you will receive an increase in social benefits.
The current retirement age is more complex than the original retirement age. If you were born before 1938 your full retirement age is 65 years of age. If you were born between 1943 and 1954 your full retirement age is 66 years of age. If you were born after 1960 your full retirement age is 67 years of age.
If you were born in one of the years between 1955 and 1960, then your full retirement age is 66 years plus 2 months for each addition year above 1954. If you were born in 1955 your full retirement age is 66 years and 2 months, if you were born in 1956 your full retirement age is 66 years and 4 months.
The last amendment to the social security age was 30 years ago and effected people that were as young as 23 years of age. Now, 30 years later, those individuals that were affected most are 53 years old and eligible for full benefits in 15 years. Analyzing trend results to the increase of the full retirement age indicate that another increase is approaching. It is not unlikely that by 2020, people born after 1972 will see an additional 2 years tagged on to their full retirement age and people born after 1980 will likely be eligible for full retirement in 2050 at the age of 70.
Currently if you retire at the age of 62 you will see a reduction in the overall percentage of full benefits you receive. The highest percentage of full benefit reductions are people born in 1960 or later who retire at the age of 62 instead of 67 who will lose a full 30% of their benefits.
The retirement age in USA was raised 30 years ago. The fact that today most Americans still consider 65 years of age the official retirement age is an indication that the IRS are not confident that their policy of raising the retirement age will sit well with America.