A Shift in Retirement Plans
For years, many Americans dreamed of retiring at 65, but that’s no longer the reality. The full retirement age (FRA) for Social Security is rising, and starting in 2025, it’s hitting 66 years and 10 months for those born in 1959. If you were born in 1960 or later, you’ll need to wait until 67 to get your full benefits. This change, set by the 1983 Social Security Amendments, is due to people living longer and the system needing to stay funded. This small shift can make a big difference in how you plan your retirement.
How the New Age Affects Your Benefits
The FRA is when you can collect 100% of your Social Security benefits. For those born in 1959, reaching 66 years and 10 months in 2025 means waiting two extra months compared to those born in 1958. If you claim benefits early at 62, you’ll get about 29% less each month, around $1,260 for a $1,800 full benefit. Waiting until 67 ensures you get the full amount, and delaying until 70 boosts it by 32%, up to $2,376 monthly. These choices can add or subtract thousands from your retirement income.
| Age | Benefit Percentage | Monthly Amount ($1,800 FRA) |
|---|---|---|
| 62 | 70% | $1,260 |
| 67 | 100% | $1,800 |
Why the Age Is Changing
The Social Security system is under pressure. Americans are living longer, with an average life expectancy of 79 years, and fewer workers are paying into the system as more retire. The Social Security Administration says the trust fund could run dry by 2034, cutting benefits by about 20% if nothing changes. Raising the FRA to 67 helps stretch the funds by paying full benefits later. Lawmakers are even talking about pushing it to 68 or 69, though no new laws have passed yet. Planning now is key to avoid surprises.
Strategies to Bridge the Gap
If you want to retire before your FRA, you’ll need a plan to cover costs. Experts suggest saving 18 to 24 months of living expenses in a high-yield savings account to avoid dipping into investments during a market dip. Part-time work, like 15 hours a week at stores like Costco, can cover basics like groceries or health insurance. Renting out a spare room could bring in $700 to $1,000 a month, or a driveway in a busy city could earn $150 to $300. These steps can help you retire on your terms, not Social Security’s.
| Strategy | Potential Income | Purpose |
|---|---|---|
| Part-time Job | $500-$1,000/mo | Covers essentials |
| Room Rental | $700-$1,000/mo | Extra cash flow |
Future Changes on the Horizon
Congress is debating more changes to Social Security, like raising the FRA to 70 or cutting benefits for future retirees. These ideas aim to fix the funding gap but could hit low-income workers hardest, especially those in physical jobs who can’t work longer. For Gen X, Millennials, and Gen Z, this means saving more in 401(k)s or IRAs now. A flexible plan, like keeping debt low or working part-time, can protect you if the rules change again.
Plan Smart for Retirement
The rising FRA is a wake-up call for Americans. Waiting until 67 or even 70 can mean bigger checks, but it’s not always possible for everyone. Check your FRA on the Social Security Administration’s website and build a savings cushion. Small steps, like cutting debt or earning extra income, can make a big difference. Don’t let the new age catch you off guard, start planning today to retire when you’re ready!