Since President Franklin D. Roosevelt signed the Social Security Act in 1935, the program has been one of the most important sources of income for retirees. Still, many people don’t really understand the nuances of it or how it’s changed over time.
Specifically, there have been three big shifts you may not be aware happened but that could have a profound impact on the money you receive from this nearly 86-year-old entitlement program.
1. Full retirement age was moved higher for younger people
The biggest change to Social Security since its inception, and the one impacting the majority of retirees, occurred as a result of 1983 amendments. It was a change to the full retirement age (FRA), which is the age you become eligible to receive your standard benefit. Claiming before FRA results in early filing penalties that permanently reduce monthly income.
Full retirement age was originally set at 65. But the 1983 amendments gradually moved FRA back for those born in 1943 or later. And for those born in 1955 or after, FRA is actually moving up slowly from 66 to 67, with anyone born in 1960 or later not eligible for their standard benefit until 67.
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For those who still think of 65 as the standard age of retirement, this big change to Social Security could mean you must either wait longer than planned to claim…