If You Are Born in 1959, What Is Full Retirement Age?

Social Security plays a significant role in the financial planning for many individuals as they approach their later years. Established to provide a safety net, this program offers retirement benefits that can supplement other sources of income, such as pensions and personal savings. Understanding how these benefits are determined and when they can be accessed is an important part of preparing for retirement. The age at which an individual chooses to claim benefits directly impacts the monthly amount received.

Full Retirement Age for 1959 Birth Year

For individuals born in 1959, the full retirement age (FRA) for Social Security is 66 years and 10 months. This specific age is when a person becomes eligible to receive 100% of their primary insurance amount (PIA), which is the full monthly benefit calculated based on their earnings history. The full retirement age has gradually increased over time from 65 for those born before 1938, reaching 67 for individuals born in 1960 or later, as a result of the 1983 Social Security Amendments.

Attaining full retirement age means no reduction will be applied to the basic benefit amount due to early claiming. While individuals can begin receiving benefits as early as age 62, doing so will result in a permanent reduction. Conversely, delaying benefits beyond full retirement age can lead to an increase in the monthly payment. This age represents a benchmark for maximizing the standard Social Security benefit.

Impact on Social Security Benefits

The timing of when an individual begins to receive Social Security benefits has a direct effect on the monthly payment amount. Claiming benefits before reaching the full retirement age results in a permanent reduction. For those who claim early, the reduction is calculated based on the number of months prior to their full retirement age. For instance, the benefit is reduced by 5/9 of 1% for each month up to 36 months before full retirement age.

If benefits are started more than 36 months prior to full retirement age, an additional reduction of 5/12 of 1% per month applies for those extra months. For someone born in 1959, electing to receive benefits at the earliest age of 62 can result in an approximate 29% reduction from their full retirement age benefit. This reduction is a permanent adjustment to the monthly benefit, meaning the lower amount will be received for the duration of retirement.

Conversely, delaying the claim for Social Security benefits past the full retirement age can lead to increased monthly payments through delayed retirement credits (DRCs). These credits are earned for each month benefits are postponed beyond FRA, up until age 70. For individuals born in 1943 or later, delayed retirement credits accumulate at a rate of 8% per year, or approximately 2/3 of 1% for each month of delay. Delaying benefits until age 70 can result in a benefit that is approximately 24% to 32% higher than the amount received at full retirement age.

Factors Affecting Benefit Amount

Beyond the full retirement age and the timing of benefit claims, several other factors influence the Social Security benefit amount an individual receives. The benefit calculation is based on an individual’s lifetime earnings record. The Social Security Administration uses a formula that considers up to 35 years of an individual’s highest indexed earnings. These earnings are adjusted for changes in average wages over time to reflect their value in today’s economy.

From these indexed earnings, the Average Indexed Monthly Earnings (AIME) are calculated. AIME determines the Primary Insurance Amount (PIA). If an individual has fewer than 35 years of earnings, zero earnings years are factored into the calculation, potentially lowering the AIME and PIA.

Cost-of-Living Adjustments (COLAs) also influence the benefit amount over time. These adjustments are typically applied annually to maintain the purchasing power of benefits in the face of inflation. COLAs are determined based on the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).