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SOCIAL SECURITY TO INCREASE MINIMUM RETIREMENT AGE FROM 62 TO 64?

Are you age 62 (or close) and thinking about taking early retirement from Social Security?  Act fast because there is tremendous pressure in Washington, DC to increase the minimum retirement age from 62 to 64.

The full retirement age, at which you may start Social Security benefits with no penalty, is 67 for most individuals, depending on the year you were born.  Currently, an individual may retire as early as age 62 with a 30 percent reduction in benefits.

Congress wants to change that, making age 64 the earliest you could retire on Social Security.

What's this all about?  It's about money deficits:  the Social Security trust funds are being exhausted.  The Social Security Administration operates two trust funds from which benefits are paid:  the Retirement Trust Fund and the Disability Trust Fund.

Every so often, the US government estimates how long these trust funds will be able to pay full benefits to eligible Americans.  According to the latest estimate, Social Security will not be able to pay full benefits after 2035.  If congressional action is not taken, current benefits would be reduced to about 80 percent.  So, a $1,000 monthly benefit would drop to $800.

Simply put, the trust funds are paying out more than they are taking in.  There are only two ways to correct this:

1.  Take in more money, or

2.  Pay out less.

Congress has been fooling around with retirement ages for decades.  Once, full retirement for everyone was age 65, the same age as eligibility for Medicare.   

In 1983, Congress passed amendments to gradually increase the full retirement age from 65 to 67 over a 23 year period.  However, early retirement at age 62 was still possible but with a reduction in benefits by 30 percent.

As of this writing (March 2023) early retirement age age 62 is still possible.  But be warned:  Action is underway in Washington to eliminate the age 62 option and make the earliest available age 64.

While nearly every member of congress has vowed "not to reduce Social Security benefits," they are actively doing so by monkeying around with retirement ages, which actually do reduce benefits, just in a less obvious way.


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