Over the years, there have been significant changes to Social Security benefits. These changes might be an annual increase in benefits; suppose there is a rise in the costs of the consumer price index. Another Social Security change might be a change in the amount of income subject to the benefits taxes.
Recently, a significant change occurred, affecting when workers eligible for benefits can claim their benefits and the amount of Social Security payment they can receive. Although this year (2022) will be the last time such adjustment takes place, it’s crucial for existing and potential retirees to understand the implication of this adjustment.
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If you don’t understand the Social Security benefits program intricacies, there is a high probability that you may not know the implication of this FRA change.
Suppose you don’t know much about this current law; below are the crucial things to note:
• If you are a retiree, your first time of becoming eligible for the benefits is when you reach 62 years.
• An early claim is when you claim your benefits before the FRA or at 62.
• Your monthly benefits will reduce due to early filing penalties if you claim your benefits early. These early filing penalties apply to each month of filling before the FRA.
• The full retirement age (FRA) is calculated based on the year you were born. However, the FRA is later moving due to the 1983 amendments to the Social Security rule.
Due to the shift in FRA for newly eligible Social Security benefits beneficiaries, some new beneficiaries may have to wait for some time, even after reaching 62, before they can receive the payment of their standard benefits. Besides, this group of people will have lesser chances of earning delayed retirement benefits.
Impact of full retirement age (FRA) changes on new retirees.
Since the full retirement age depends on your birth year, for federal workers who will be 62 years in 2022 or above, their FRA will be 67. For this class of seniors to avoid penalties, they need to wait until they are 67.
On the other hand, for seniors who turned 62 in 2021, their FRA will be 66 and 10 months. An FRA of 66 and 8 months apply to seniors who are 62 in 2020. These seniors must wait for their respective FRA to avoid paying early filing penalties.
Congress could shift the FRA further for potential retirees by modifying the Social Security rule. Unless this modification occurs, seniors who are eligible for benefits in 2022 or beyond may claim their full benefits at the same time as older seniors.
Contact Information:
Email: [email protected]
Phone: 9568933225
Bio:
Rick Viader is a Federal Retirement Consultant that uses proven strategies to help federal employees achieve their financial goals and make sure they receive all the benefits they worked so hard to achieve.
In helping federal employees, Rick has seen the need to offer retirement plan coaching where Human Resources departments either could not or were not able to assist. For almost 14 years, Rick has specialized in using federal government benefits and retirement systems to maximize retirement incomes.
His goals are to guide federal employees to achieve their financial goals while maximizing their retirement incomes.
