For decades, Americans have thought of 65 as the “magic number” for retirement. But in 2025, that picture changes yet again. For those born in 1959, the full retirement age (FRA) to claim Social Security will rise to 66 years and 10 months—part of a gradual shift set in motion more than 40 years ago.
At first glance, two extra months might not seem like a big deal. But when it comes to your monthly Social Security check, those months can make a serious difference.
What Changed in Social Security’s Retirement Age?
Back in 1983, Congress passed amendments that slowly raised the FRA from 65 to 67. The increase happens in two-month increments, depending on your birth year. So, if you were born in 1958, your FRA was 66 and 8 months. If you were born in 1959, it jumps to 66 and 10 months. Anyone born in 1960 or later? You’ll need to wait until age 67 for full benefits.
Filing early at 62 is still an option, but here’s the catch: your check will be permanently reduced—roughly 29% less if you were born in 1959, and about 30% less for those born in 1960 or later. On the flip side, if you hold off past your FRA, your benefit grows by about 8% each year, maxing out at age 70 with a potential 32% boost.
Bridging the Gap if You Retire Early
Not everyone wants—or can—wait that long. If you’d like to step away from full-time work before hitting your FRA, here are some smart ways to fill the gap:
- Phased retirement: Negotiate fewer workdays. Even 15 hours a week could cover essentials like groceries and health premiums.
- Cash cushion: Aim to stash away 18–24 months’ worth of expenses in a high-yield savings account. That way, you won’t need to sell investments during a downturn.
- Rent out unused space: A spare room could bring in $700–$1,000 a month, while an urban driveway might fetch $150–$300.
- Bridge jobs with benefits: Companies like Costco, Trader Joe’s, and Home Depot often offer health insurance for part-time workers logging just 20–28 hours weekly.
Tax-Smart Strategies for Early Retirees
The way you draw from your accounts matters just as much as how much you’ve saved. Consider these tactics:
- Tap taxable accounts first: Let your 401(k) or IRA keep growing while avoiding early withdrawal penalties.
- Roth IRA contributions: You can pull out contributions (not earnings) tax- and penalty-free anytime, giving you a flexible, tax-free option.
- Keep income low: Lower income could qualify you for ACA subsidies, saving thousands on health coverage until Medicare kicks in at 65.
- Side hustles: Online tutoring ($30–$50/hour), pet sitting, or selling crafts can add extra cash without a full-time grind.
Preparing for the Future
The move to age 67 isn’t the end of the story. Lawmakers are already floating proposals to raise the FRA to 68—or even 69—in the coming decades. That makes flexibility essential.
If you’ve built up a cash reserve, lined up part-time options, and thought through tax-smart withdrawals, you’ll have the freedom to retire on your own terms.
The bottom line? Retirement planning today is more complicated than it was for your parents. But with a solid strategy, you can make sure the rising retirement age doesn’t control your timeline—you do.