Social Security in 2024: What Every Generation Needs to Know About Claiming Benefits

Social Security is constantly evolving in terms of the amount of money recipients get and what they qualify for, but it hasn’t undergone many major structural changes since the first check was issued in 1940. The last significant reforms came in 1983, when the retirement age was raised and more benefits were taxed. The next overhaul could be coming soon, however — and it would impact Americans of all ages.

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The main challenge right now has to do with the looming depletion of Social Security’s Old Age and Survivors Insurance (OASI) Trust Fund. The fund is expected to run out of money in about a decade, leaving Social Security solely dependent on payroll taxes for funding. Those taxes currently fund about 77% of benefits.

Because of that shortfall, many Americans fret over Social Security’s future. As previously reported by GOBankingRates, a 2023 Gallup poll found that 80% of U.S. adults under age 62 are worried that Social Security will not be available when they are eligible to receive it.

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Here’s how the results broke down by age group when respondents were asked if they were worried or extremely worried that Social Security would not be available when they are eligible:

• 18-29 years old : 71%
• 30-39: 80%
• 40-49: 86%
• 50-61: 81%

Any major changes are probably years away because it’s so hard for the current divided Congress to agree on major legislation of any kind. That means that when it comes to claiming Social Security benefits, the same rules and strategies apply in 2024 that have applied for decades — and they apply to everyone, no matter your age.

Here’s what every generation should know about claiming Social Security benefits. And if you don’t have 40 credits, here’s how you can still get a monthly check .

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Baby Boomers

The vast majority of boomers (born from 1946-1964) have already qualified for Social Security benefits — and a large percentage have filed for them. The full retirement age is 67 for anyone born in 1960 or later, according to the Social Security Administration . For those born in 1958, the FRA is 66 years and eight months. For those born in 1959, it’s 66 years and 10 months. You can apply for benefits online; by calling the SSA at 800-772-1213 (TTY 800-325-0778); or by visiting your local Social Security office.

You can claim retirement benefits as early as age 62, but the longer you wait to apply, the higher your monthly payment will be. After you hit full retirement age, your benefit will increase by 8% each year you wait to claim . Waiting until age 70 means your benefit could be more than 70% higher than if you claimed at age 62. There is no financial advantage to claiming after age 70.

If you apply for Social Security and earn outside income before reaching full retirement age, your benefits could be reduced depending on how much income you earn. In 2024, the SSA withholds $1 of benefits for every $2 in earnings above $22,320.

Gen X

The oldest Gen Xers (born in 1965) can begin applying for Social Security benefits as early as 2027. For now, your full retirement age will be 67, regardless of which year you were born. However, because the OASI trust fund is expected to run out of money as early as 2033, there’s a chance the FRA will be raised to bolster the SSA’s finances. Although it’s usually better to wait as long as possible to claim benefits, there are situations when it might make sense to claim them early, such as if you have a lot of debt to pay off or have a medical condition that could shorten your life span.

Millennials

The millennial generation (born 1981-1996) still has a couple of decades before they can apply for Social Security benefits. The oldest millennials turn 62 in 2043, and as things stand now they can begin claiming that year.

One thing to keep in mind is that you need at least 10 years of work, or 40 credits, to qualify for Social Security retirement benefits . Benefits are based on average indexed monthly earnings on up to 35 full working years. The highest-earning 35 years are used in the calculation.

Gen Z

The best move Gen Zers (born 1997-2012) can make right now is to open a my Social Security account and begin tracking your yearly wages. Reviewing your earnings history is the best way to determine what your eventual retirement benefit will be. Many experts predict that future benefits will be lower (percentage-wise) than previous generations because of financing issues impacting the SSA, so you should also put a big priority on your private retirement savings.

Final Takeaways

One thing all generations should keep in mind is that the vast majority of funding for Social Security comes from payroll taxes and those aren’t going away anytime soon. Even so, some lawmakers support legislation to reform Social Security before the OASI runs out.

Last year, the 176-member House Republican Study Committee approved a fiscal blueprint that would gradually increase the full retirement age to 69 years old for seniors who turn 62 in 2033. The current full retirement age is 66 or 67, depending on your birth year. For all Americans born in 1960 or later, the FRA is 67. Some lawmakers also have proposed more straightforward cuts to Social Security by slashing benefits across the board.

But others support bolstering the program rather than cutting it. One suggestion is to raise the threshold on how much yearly income is subject to Social Security taxes. Another is to eliminate benefits for wealthy retirees .

In addition, some lawmakers support changing the formula that determines the annual cost-of-living adjustment (COLA) so it better reflects the amount of money seniors spend on healthcare. The Social Security COLA is implemented each year to help account for inflation. In 2024, the COLA is 3.2%. That will drop to 2.5% in 2025, the Social Security Administration reported in October 2024.

This article originally appeared on GOBankingRates.com : Social Security in 2024: What Every Generation Needs to Know About Claiming Benefits