The dream of retiring at 65—the milestone ingrained in American culture—is quietly slipping away. Starting in 2025, the Social Security Administration (SSA) will officially raise the full retirement age (FRA) to 66 years and 10 months for those born in 1959. For anyone born in 1960 or later, the FRA hits 67 years flat.
At first glance, a couple of months may seem insignificant. But for millions planning their exit from the workforce, those extra days could mean thousands of dollars lost—or gained depending on when and how benefits are claimed.
Why the Retirement Age Keeps Rising
This change is not sudden. It dates back to the 1983 Social Security Amendments, a bipartisan effort designed to keep the system solvent as Americans began living longer. Back then, lawmakers decided to gradually raise the FRA from 65 to 67 in two-month increments over several decades.
Now, the timeline is reaching its final stretch:
| Year of Birth | Full Retirement Age (FRA) |
|---|---|
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960 or later | 67 years |
The reasoning is straightforward: Americans are living longer, drawing benefits over more years. Without adjustments, the Social Security Trust Fund is projected to run short around 2035.
The High Cost of Retiring Early
While you can claim benefits at 62, doing so comes with a steep penalty:
- Born in 1959: Monthly benefits are reduced about 29%.
- Born in 1960 or later: Reduction rises slightly to 30%.
For example, if your full benefit at FRA is $2,000, taking it at 62 could drop it to roughly $1,400 per month—a $600 monthly difference for life.
On the flip side, delaying benefits past your FRA can earn delayed retirement credits, adding roughly 8% per year up to age 70. That same $2,000 benefit could swell to nearly $2,640 per month if you wait.
Smart Ways to Bridge the Gap
Not everyone can—or wants to—work into their late 60s. Here are practical strategies to help smooth the transition:
- Build a cash cushion: Save 18–24 months of living expenses as a “bridge fund.”
- Consider part-time or freelance work: Supplement income without touching retirement accounts.
- Use tax-efficient withdrawals: Draw from Roth IRAs or taxable accounts first to reduce taxable income.
- Coordinate with your spouse: Timing each claim can maximize household benefits.
- Use SSA tools: The Retirement Estimator helps simulate different claiming scenarios.
What Lawmakers Are Discussing
Even as 67 becomes standard, some policymakers suggest raising the FRA to 68 or 69 in future reforms. Supporters cite system solvency, while critics warn it unfairly penalizes workers in physically demanding jobs who cannot extend their careers.
As financial advisor Beth Lynch notes:
“You don’t want to retire when Social Security tells you to—you want to retire when you’re ready. That means planning for the possibility of further changes.”
What You Can Do Right Now
If retirement is on your horizon, consider these steps for 2025 and beyond:
| Action Item | Why It Matters |
|---|---|
| Check your FRA on SSA.gov | Confirm your full benefits eligibility |
| Review 401(k) & IRA balances | Know how much you can rely on before claiming |
| Create a bridge strategy | Avoid early-claim penalties |
| Factor in taxes | Social Security benefits may be partially taxable |
| Stay updated on legislation | Future changes could shift your plan |
Even with these adjustments, Social Security remains a critical income source. For nearly half of retirees, it represents at least 50% of household income, making strategic timing crucial.
FAQs
1. What is the new full retirement age in 2025?
66 years and 10 months for those born in 1959.
2. When will the FRA reach 67?
Starting in 2026 for anyone born in 1960 or later.
3. Can I still claim Social Security at 62?
Yes, but benefits are permanently reduced by roughly 30%.
4. Is Congress planning to raise the FRA beyond 67?
Discussions are ongoing, but no new laws have been passed as of 2025.
5. How can I maximize my benefits?
Delay claiming until FRA—or age 70—and manage withdrawals from other accounts to minimize taxes.
