Mandatory Spending

Function 650 - Social Security

Raise the Full Retirement Age for Social Security

CBO periodically issues a compendium of policy options (called Options for Reducing the Deficit) covering a broad range of issues, as well as separate reports that include options for changing federal tax and spending policies in particular areas. This option appears in one of those publications. The options are derived from many sources and reflect a range of possibilities. For each option, CBO presents an estimate of its effects on the budget but makes no recommendations. Inclusion or exclusion of any particular option does not imply an endorsement or rejection by CBO.

Billions of Dollars 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2023–
Change in Outlays 0 * -1 -2 -4 -6 -12 -20 -32 -45 -7 -121

This option would take effect in January 2024.

Estimates include budgetary effects for Social Security benefits; that spending is classified as off-budget.

* = between zero and -$500 million.

The age at which workers become eligible for full retirement benefits from Social Security—known as the full retirement age (FRA)—depends on their year of birth. For workers born after 1959, the FRA is 67. (For workers born earlier, the FRA is lower.) Workers, regardless of when they were born, may claim benefits as early as age 62. Their scheduled benefit is adjusted on the basis of how much earlier or later than their FRA they choose to start receiving benefits. Up to age 70, the later a worker begins receiving benefits, the larger the monthly benefit.

Under this option, the FRA would increase from 67 by two months per birth year for workers born between 1962 and 1978. As a result, for all workers born in 1978 or later, the FRA would be 70. As under current law, workers could still choose to begin receiving benefits at age 62, but the reduction in their initial scheduled monthly benefit for claiming benefits early would be larger under this option than under current law. An increase in the FRA would reduce scheduled lifetime benefits for every affected Social Security recipient, regardless of the age at which a person claimed benefits. Under this option, workers could maintain the same scheduled monthly benefit as under current law by claiming benefits at a later age, but they would then receive benefits for fewer months.