When applying for retirement benefits in 2025, keep in mind that the Social Security Administration updates the program annually to reflect current trends. Since the 1980s, when the program was on the edge of failure, workers have gradually increased their full retirement age, which is a significant change in recent decades.
Since the program’s inception in 1935, Americans’ longer life expectancy has led to an increase in the full retirement age. However, lawmakers are considering further increases and have not yet finalized the change.
First, what is full retirement age, and why is it important? Workers can retire before or after full retirement age and still receive benefits. Full retirement age refers to the age at which all Social Security payments become accessible to workers. If they retire prematurely, they risk losing up to 30% of their benefit, while delaying retirement allows them to earn up to 24% more in monthly payouts.
Previously, the complete retirement age was 65 for all individuals, but today it varies by birth year. In 2025, people born between May 2, 1958, and February 28, 1959, will see a full retirement age hike. If you fall into this group, you will reach full retirement age that year. Those born before 1960 have reached full retirement age, whereas those born after 1960 must wait until age 67 to obtain full benefits.
Many people do not wait until they reach full retirement age to claim their benefits. Some people prefer to forego 30% of their benefits and claim as soon as possible, at age 62, for a variety of reasons, including health.
Some people do not anticipate living well into their 70s and want to enjoy retirement and their family while they can, so they choose to retire as soon as possible, regardless of the loss of benefits.
Others prefer the original retirement age of 65, which still provides a major advantage. When a person reaches 65, they become eligible for Medicare and no longer need to work for inexpensive healthcare. As a result, people often choose to leave their job one or two years before full retirement age.
Some, but only a few, elected to wait until they reached the age of 70, when they are eligible to receive benefits. Delaying until this age will result in no benefits, as there will be no further increases in payments. However, nearly no one can afford to wait if they are not working, and most organizations will not hire someone full-time until they reach the age of 70, limiting the number of people who can take advantage of this opportunity.
Maximum Social Security Benefits depending on retirement age in 2025
Having said that, waiting pays off. The amount of money a person is entitled to receive from Social Security depends on when they retire and how much they earned throughout their career. However, the Administration provides a few guideline figures to highlight the difference in claiming ages.
In 2024, those reaching full retirement age will get a maximum monthly pension of $3,822. Thanks to inflation adjustments, that figure will grow to $4,018 per month in 2025, or little more than $48,000 per year. However, if you delay retirement until age 70, the numbers improve considerably more. By 2025, the maximum monthly payout for those waiting until 70 will increase to $5,108, or over $61,300 annually.
Also See:- Official list of all Social Security changes starting January 1, 2025 – Warning for retirees
