Social Security's full-benefits age on the rise.

• Position: Your Life

Many Americans still do not know that the age at which they will be eligible for full Social Security retirement benefits is rising, and this lack of knowledge could undermine their retirement plans. In their annual Retirement Confidence Survey, the Employee Benefit Research Institute and the American Savings Council found that only 18% of respondents could answer correctly the retirement age at which they could collect full benefits. Not surprisingly, 32% assumed it is age 65--the historical retirement age--though, in fact, anyone currently younger than 65 will have to wait beyond that age. Overall, 55% thought they would collect earlier than was correct for their age, with 12% believing that full benefits start as early as 62.

Knowing the right age is crucial to making retirement plans that will not leave you short of money once you retire. Here's a brief review of the changes and how you might modify your plans to compensate for the later retirement age.

Beginning in 2003, the full-benefit age for Social Security began to increase gradually, from 65 to 67. For people retiring in the next few years, the change will not be dramatic. Someone reaching age 65 in 2006, for example, will have to wait until age 65 and eight months to collect full benefits. People born from 1943 through 1954, however, must wait until age 66, and those born in 1960 or later must wait until age 67.

Despite the change in full-benefits age, Congress did not adjust when an individual can start collecting early, which remains age 62. However, these benefits are reduced, and the gap increases as the full-benefits age rises.

For example, when the normal retirement age was 65, retirees who began collecting Social Security at 62 found their monthly check reduced...