For generations, most Americans pictured retirement arriving at age 65, but that number has been slowly creeping upward. Starting in 2025, anyone born in 1959 will officially see their full retirement age (FRA) jump to 66 years and 10 months. It might sound like a tiny tweak, but when it comes to Social Security benefits, those extra months can make a serious difference.
What Changed in Social Security’s Retirement Age?
The shift traces back to the 1983 Social Security Amendments, which gradually raised the FRA from 65 to 67 in two-month steps. If you were born in 1958, your FRA was 66 and 8 months. For those born in 1959, it becomes 66 and 10 months. And if you were born in 1960 or later? You’ll be looking at age 67 before you’re entitled to full benefits.
The math matters. Claiming benefits early at 62 will cut your monthly check by about 29% if you were born in 1959, and by 30% if you were born in 1960 or later. On the flip side, delaying beyond your FRA can boost your benefit by up to 8% each year, topping out at a 32% increase if you wait until age 70.
Bridging the Gap if You Retire Early
Not everyone wants—or can afford—to wait. Here are some creative ways Americans are filling the gap before reaching FRA:
- Phased Retirement: Instead of working full-time, try cutting back to three or four days a week. Even 15–20 hours can cover basics like groceries or insurance.
- Cash Cushion: Build a runway of 18–24 months of living expenses in a high-yield savings or money market account. That way, you’re not forced to sell investments in a downturn.
- Home Equity Hacks: Rent out a spare room or driveway. A room might bring in $700–$1,000 a month; urban parking spots often fetch $150–$300.
- Bridge Jobs with Benefits: Big retailers like Costco, Home Depot, and Trader Joe’s offer part-time schedules (20–28 hours a week) that still come with health insurance.
Smart Tax and Withdrawal Strategies
If you’re tapping into savings early, make it count:
- Dip into Taxable Accounts First: Let retirement accounts like IRAs and 401(k)s keep compounding while you use taxable brokerage funds.
- Leverage Roth IRA Contributions: You can withdraw contributions (not earnings) tax- and penalty-free, giving you flexibility.
- Keep Your Income Low: Doing so could help you qualify for Affordable Care Act subsidies, cutting health insurance costs until Medicare kicks in at 65.
- Earn Side Income: Online tutoring ($30–$50/hour), pet sitting, or even selling crafts can bring in extra cash without locking you into full-time work.
Looking Ahead: Could Retirement Age Rise Again?
The journey from 65 to 67 is almost finished, but there’s already talk in Washington of pushing the FRA to 68—or even 69. Nothing has been signed into law yet, but the conversation is happening.
That’s why flexibility is the new retirement superpower. Having a plan that includes a cash buffer, potential part-time income, and tax-smart withdrawal strategies will keep you prepared if the rules change again.
FAQs
What is the new full retirement age for Social Security?
In 2025, the FRA will be 66 years and 10 months for those born in 1959, and 67 for those born in 1960 or later.
Can I still claim Social Security benefits at 62?
Yes—but you’ll only receive about 70% of your full benefit. The later you wait, the bigger your monthly check.
Why is the retirement age being raised to 67?
Americans are living longer, and fewer workers are paying into Social Security. Raising the FRA helps keep the system solvent.
How can I prepare for the change?
Save a cash buffer, consider part-time or phased work, and plan when you’ll claim benefits carefully. The right strategy could mean tens of thousands more over the course of your retirement.