The House passed legislation Monday to update the language used by the Social Security Administration to describe when American workers can claim their retirement benefits.
The bill, H.R.5284, the Claiming Age Clarity Act, "tries to make it more obvious that if you claim benefits early (before age 67), you will have a lifetime reduction in your monthly benefits, and that conversely, if you delay claiming till age 70, you will receive your highest possible monthly lifetime benefit," Maria Freese, senior legislative representative at the National Committee to Preserve Social Security and Medicare, told ThinkAdvisor in a previous interview.
The Claiming Age Clarity Act, sponsored by Rep. Lloyd Smucker, R-Pa., changes the terminology in materials produced by the Social Security Administration.
The bill, which passed the House Ways and Means Committee in September, states that the agency must use minimum monthly benefit age instead of early eligibility age.
"This refers to the earliest age (62 under current law) at which a worker may claim benefits," the bill states. "(Currently, the benefit amount of a worker who claims benefits early is reduced to account for the longer period during which the worker is expected to receive benefits.)"
SSA must also use standard monthly benefit age instead of "full retirement age" and "normal retirement age."
"These terms refer to the age at which a worker may claim benefits without a reduction in the benefit amount," according to the bill's language.
Currently, this age ranges from 65 to 67, depending on the worker's year of birth.
Finally, the SSA must use the term maximum monthly benefit age for any reference to age 70 as the maximum age at which a worker may receive delayed retirement credits.
"SSA may not use the term delayed retirement credit," as "these terms refer to the mechanism that increases the benefit amount of a worker who delays claiming benefits after reaching the full retirement age," the bill states.
"Currently, a worker receives a credit for each month between the full retirement age and age 70 that the worker delays claiming benefits. Each credit increases the benefit amount that the worker will receive after claiming benefits by a specified percentage," the bill states.
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