One of the most important decisions for retirees – when to receive social security benefits – will have a different approach under a bill that may soon become law.
A bipartisan bill titled the "Clarifying Age of Eligibility Act" (Claiming Age Clarity Act) aimed to adjust certain terminology used to describe when workers are eligible to receive social security retirement benefits, and it was passed by the Senate on Tuesday.
The bill has now been sent to U.S. President Donald Trump for his signature. The White House has not responded to requests for comment CNBC.com regarding whether or when he will sign the bill.
Receiving social security benefits at the age of 62 – the first age at which eligible retirees become eligible to receive them – may result in a permanent reduction of up to 30% in benefits compared to receiving them at the full retirement age. If one waits until the age of 67 to receive benefits, those born in 1960 or later can receive 100% of the benefits they have earned. For each year postponed after the “full” retirement age, up to the age of 70, future recipients can get an 8% increase in their benefits.
The "Clarified Retirement Age Act" requires the modernization of terminology surrounding the retirement age, in order to help retirees better understand the choices they are making. This act will not change the retirement age itself, nor will it alter the manner in which benefits are distributed.
"This straightforward legislation is aimed at simplifying bureaucratic jargon, as such terminology can mislead Americans into making poor financial decisions," said Republican Representative Lloyd Smucker of Pennsylvania ( Lloyd Smucker ) when he co-sponsored the bill in 2025 with Democratic Representative Don Beyer ( Don Beyer ).
The new terminology uses "minimum," "standard," and "maximum."
According to the terms of the bill, the age of 62 will no longer be referred to as the "early retirement eligibility age" currently used by the Social Security Administration ( early eligibility age ), but will instead be called the "minimum benefit age" ( minimum benefit age ).
For individuals aged 66 to 67 – depending on the year of birth, they may be entitled to 100% of their accumulated benefits at this age – the institution will use the “standard retirement age” ( standard benefit age ) instead of the current “full retirement age” ( full retirement age ).
And at the age of 70, the Social Security Bureau refers to it as the "maximum welfare age" ( maximum benefit age ), rather than the current "delayed retirement age" ( delayed retirement age ).
The funding challenges for social security funds still exist.
The Senate's passage of this bill is "good news for Americans who are making decisions regarding social security benefits," said Senator Bill Cassidy (_Bill Cassidy, a Republican from Louisiana), after proposing the Senate version of the bill in 2025. Cassidy stated that Congress must now "address the greater challenges facing social security," namely the solvency issues faced by the program's trust fund.
Tight social security funds are one of the reasons why people often receive benefits in advance. However, experts generally believe that retirees are usually best to postpone receiving their benefits as long as possible, until the age of 70.
"Changing the name is a good step, a very important step, but there is still more work to be done," said Shai Akabas, Vice President for Economic Policy at the bipartisan policy think tank Center for Bipartisan Policy in Washington ( Bipartisan Policy Center ). The think tank's lobbying affiliate ( BPC Action ) supported this bill.
Akabas said that the idea of these changes in wording began about 10 years ago. At the same time, measures to strengthen communication regarding social security retirement benefits were also under consideration, including increasing the frequency of mailed benefit instructions.
The Congressional Budget Office has not yet assessed the costs of the "Clearing the Age of Eligibility Act." Akabas stated that in the long run, this change should not have a significant impact on the financial situation of the program. In the short term, it may actually save funds for the program, as it could encourage people to receive benefits later than they otherwise would.
In the end, a broader social security reform that would address the funding issues of this project will require compromise between the two parties. Akabas said that although the "Clearing the Age of Eligibility Act" is a relatively minor change, it indicates that there is an opportunity for members of both parties to continue to engage in dialogue regarding this project.
AARP also supports the "Clear Age of Retirement Benefits Act." Research by this non-profit organization, which represents Americans aged 50 and above, has found that although people are aware that delaying the receipt of social security benefits will increase their retirement benefits, they may not be sure at what age receiving them will maximize those benefits.
