Posted on 12/18/24
| News Source: Pikesville Patch
Baltimore, MD - Dec. 18, 2024 - The Social Security full retirement age (FRA) is set to increase in 2025, affecting Maryland residents born in 1960 or later. Currently, individuals can claim reduced benefits starting at age 62, but to receive full benefits, they must wait until the FRA. For those born in 1960 or later, the FRA will rise to 67 in 2025.
This change means that Maryland residents turning 62 in 2025 can still begin receiving Social Security benefits; however, these benefits will be reduced to account for the longer period over which they will be received. To obtain full benefits without reduction, individuals will need to wait until age 67.
It's important for Maryland residents to consider this adjustment in their retirement planning. Delaying benefits until reaching the FRA can result in higher monthly payments, while claiming earlier will lead to reduced benefits. Additionally, for each year benefits are delayed past the FRA, up to age 70, individuals can receive delayed retirement credits, increasing their benefits further.
Given that Social Security benefits constitute a significant portion of retirement income for many, understanding these changes is crucial for effective financial planning. Residents are encouraged to assess their retirement strategies in light of the upcoming FRA increase to make informed decisions about when to begin receiving benefits.
Social Security applicants in Maryland will face a growing retirement age beginning in 2025.
The age for which workers become eligible for 100 percent of their retirement benefits was 65 for many decades, but in 1983 that threshold was adjusted to incrementally raise the age to match the growing expected lifespan.
While those aged 62 can already begin collecting some retirement benefits, taxpayers cannot receive 100 percent of their lifetime earnings until they reach full retirement age.
The full retirement age has gradually increased by two months each year since in 1983. For individuals born in 1958, it is 66 years and 8 months. By 2025, it will reach 67 years for those born in 1960 or later.
Full details on retirement benefits and eligibility can be found here on the Social Security Administration website.
Those who don't apply for benefits until after that full retirement age can also get a form of backpay or delayed retirement credits that increase monthly payments.
But the retirement age isn't the only change in store for social security. A modest cost-of-living adjustment of 2.5 percent will also take effect, boosting retirement benefits by about $50 a month beginning in January, according to the SSA. The adjustment is based on inflation as its reported by the Consumer Price Index.
In Maryland, more than 1.06 million retired residents were collecting social security benefits in 2023, according to the SSA.