For many Americans, the thought of retirement often revolves around reaching the magical age of 65. However, the full retirement age (FRA) for Social Security benefits has been gradually increasing, and for those born in 1959, it will hit 66 years and 10 months starting in 2025.
While the change may seem small, it has important implications on how and when you can claim your benefits. Understanding how these changes affect your retirement strategy is key
to making the most of your Social Security benefits.
What Exactly Changed in Social Security’s Full Retirement Age?
The 1983 Social Security Amendments gradually pushed the FRA from 65 to 67, with a schedule to raise it in two-month increments. Those born in 1959 will see their FRA at 66 years and 10 months starting in 2025.
For individuals born in 1960 or later, the full retirement age will be 67. This change means that those who were expecting to retire at 66 years and 8 months (for the 1958 cohort) will now have to wait an additional two months.
For people who plan to retire earlier than their FRA, early filing at 62 results in a significant reduction of monthly benefits—about 29% for those born in 1959, and up to 30% for those born in 1960 or later.
However, delaying your Social Security claim past the FRA can result in an increase of up to 8% annually, capping at a 32% boost if you wait until age 70.
How to Bridge the Gap Between Early Retirement and Full Benefits
For those who wish to retire before reaching the full retirement age, there are a few strategies to make the transition smoother without relying on a full-time job:
- Phased Retirement: Consider negotiating a three- or four-day workweek. Working part-time, even as little as 15 hours a week, can help cover essential costs like health insurance and groceries without needing to dip into retirement savings.
- Cash Runway: It’s crucial to have a financial cushion to support you between retirement and full Social Security benefits. Financial experts recommend saving 18-24 months of living expenses in a high-yield savings account or money-market account. This can provide stability without the need to sell investments in a downturn.
- Monetize Extra Space: If you have extra space in your home or driveway, consider renting it out. Long-term room rentals can bring in $700–$1,000 a month, and driveway parking in busy urban areas can earn $150–$300.
- Bridge Jobs with Benefits: Some national retailers, such as Costco, Home Depot, and Trader Joe’s, offer part-time jobs that come with medical benefits for employees who work 20-28 hours a week. These jobs can provide you with some income and health insurance while waiting to reach your full retirement age
Smart Withdrawal and Tax Strategies for Early Retirement
If you plan to retire early or bridge the gap before full Social Security benefits, there are tax-smart strategies to consider:
- Withdraw from Taxable Accounts: To avoid penalties and let retirement accounts like IRAs or 401(k)s continue growing, consider withdrawing from taxable brokerage accounts first.
- Roth IRA Withdrawals: Roth IRA contributions (not earnings) can be withdrawn tax- and penalty-free at any age. This provides a zero-tax option to access funds without affecting your tax situation.
- Keep Modified Adjusted Gross Income Low: Maintaining a low income during early retirement can help you qualify for Affordable Care Act subsidies, saving thousands on health insurance premiums until Medicare eligibility at 65.
- Side Income: If you need extra income, consider side gigs like tutoring online for $30–$50 an hour, pet sitting, or selling handmade crafts. These options allow you to earn money without committing to a full-time job.
Planning for Future Changes in Retirement Age
While the change from 65 to 67 is nearly complete, lawmakers are already debating the possibility of increasing the full retirement age to 68 or even 69 in the future.
While no new laws have passed yet, it’s a good idea to prepare for these potential changes by creating a flexible retirement plan. Having a cash reserve, part-time income, and tax-efficient withdrawal strategies will help buffer any future shifts in the Social Security system.
Retirement planning has never been more complex, and the gradual rise in the full retirement age is just one of the factors that require careful consideration.
Although the increase in retirement age to 67 may seem like a minor change, it highlights the importance of having a plan in place to navigate the shift.
Building a cash reserve, considering part-time work, and using smart tax strategies will allow you to retire when you’re ready, not when Social Security tells you to.
Keep in mind that flexibility is key, especially as lawmakers continue to debate further increases to the retirement age.
FAQs
What is the new full retirement age for Social Security?
Starting in 2025, the full retirement age for Social Security benefits will be 66 years and 10 months for people born in 1959, and 67 for those born in 1960 or later.
Can I still claim Social Security benefits at 62?
Yes, you can still claim Social Security benefits at 62, but you will receive only 70% of your full benefit amount. The longer you wait, the higher the monthly benefit will be.
Why is the retirement age being increased to 67?
The full retirement age is being increased to 67 to address the longer life expectancy of Americans. The change helps maintain the sustainability of the Social Security system.
How can I prepare financially for the new full retirement age?
To prepare for the new full retirement age, experts recommend building a cash buffer to cover 18-24 months of living expenses, considering part-time work, and planning your Social Security claim strategically.
Don’t touch my Social Security!I can’t barely afford to eat now and scrape by!!!
I know how you feel brother I’m right there with you don’t touch my social security I’m tired of not eating so tired of it it makes me want to snap and go off on the government and I know what’s wrong but I worked all my life for my retirement and you want to snatch away from my retirement no hell no that’s mine I work for it leave me alone with mine and I’ll be all right you want to give me more then you give me more I’ll take whatever you give me that way I can say thank you I appreciate it but until then don’t touch my Social Security that’s mine and don’t touch my retirement I work for it no one else did all the years I worked
Trump is a ass whole it’s crazy and now you’ll work until you drop and won’t be able to enjoy what’s left of your life
Don’t forget he recently also said “ we have too many holidays in this country”. To any minority, person making under 100k, and seniors who voted for this bloated yam, you deserve what is happening, but to the sane ones who didn’t, sorry.
Lol….like the last 4years were great with run away inflation, massive overspending and an outright invasion of our southern border….now you’re worried when things are already getting so much better???
That sounds right to me.
It’s not good to be poor. You should have found a better carrier when you had opportunity.
This is absolutely crazy ,that the retirement age has been changed . Now people are forced to work even longer ,90% of the people stressing even more how they can stay working with health issues just to get full retirement . I walk bent over 75% of my work days now have even longer to not 🚫 enjoy retirement . My father died at 67 ,what retirement he would have had .😠😡
You are so right. People DO NOT live forever, especially those with limited income.
Whose will not ours
Need more to raise my children
Trump is a piece shit useless . Karma is a bitch. We all work all are life compared to this guy that never work a day in he’s entire life. The retirement should be 55 years old. That way we the people can enjoy are life. But this pieces of shit politics all they do is makes things worse not better. That’s why from now on I’ll never waste my time any more on piece shit politics. This pieces of garbage are all the same and worse. To me voting can go to hell with all this pieces of shit politics
So what’s going to happen to people who are on disability are they still going to be getting their disability checks
The answer would be ( YES)
You voted for the son of a bitch it’s amazing. You believed every word he said all lies, he tricked you for the second time that’s pretty bad.Guess what, now we all have to live with it so quit complaining. He now controls the executive, the legislative and the judicial branches of government and the nuclear football in his pocket. See what you’ve done he has already started and will have troops in every state and you will not be able to fart without asking permission.
That’s sad, Doogie. You should get some help.
AMEN YOU GOT THAT RIGHT!!
Yes I did and ignorant people like you was what got the country in the shape it was prolonging his winning
What is discussed in this article predates Trump by decades. Nothing has been done to date that changes SSI payouts – with the exception of those with overdue student loans Why is that impacting SSI? Because the recipient did not pay back their obligation – as they promise with their signature.
Spot on
You are absolutely correct, yet most comments show how much TDS exists today.
I planned to work until my mortgage was paid off but after 22 yrs I was let go. I am 71, no one wants to hire someone older & offer health insurance so its not worth taking a part-time job. I am poverty level and most likely will lose Medicare. My life is being taken from me.
So some a-hole with more money in a month than I’ve made in my life gets a break? FU Drumpf.
Are you social security then you aren’t losing Medicare it’s automatically drafted out of your SS if your not on SS you need to sign up after 70 there isn’t any increase to SS your at the max you can draw on SS nothing changed under Trump on SS except now you don’t have to pay federal tax on it you keep that in your pocket that helps out SS recipients now!
Dang why keep going up the age ?
Hoping folks will pass before they get that age so they can keep that money !
Heck work till ya die they
All slaves to the government. 🧐🧐🤔🤔🤔
You are born with common sense if you have it, he, was born with none, and don’t expect him to change because either you have it or you don’t . He needs to be fired .
GOD IS THE WAY TRUTH AND THE LIFE
Full retirement age being raised was planned years before Trump even had his 1st term. They had planned to go to age 70. People are living longer now which mean more people are drawing it and less people are working to refill it.
If I got everydime I’d paid in the last 42 years, might could live but social security is half what we have paid….what gives the government such rights to take so much, then dwindling to other countries and support there excellence benefits at retirement. But we struggle to get our meds and hospitalized if need be?
You know the sad part is that thanks to the Democrats that disabled veterans are struggling to even get freaking Social Security disability specially here in Georgia man they gonna try to send me the more medical exams when I know what I’ve been through. I got toxic exposure I’ve been through the Gulf War and I lost two kids during the war and after the war, you know, I had one die due to toxic exposure in one die due to a drug addict that literally left a kid in a damn toddler bed, and they pulled a dresser over on top of himself while I wasn’t there. But yet we’ve Veterans get persecuted.
Don’t worry everyone Him & his friends are making America Great Again…..when it’s over and done we will open all the books on transparency. And All and I mean All. Will pay…. No witch hunt. No bias. From Sea to shining Sea. Every state conservative Republican reps , senate, governors, Supreme state court, federal Reps, Senator, Vice & President….We as a people. Will take back our country…..and will prosecuted everyone who has violated the laws of our country & the Constitution, Bill of rights of our country…..
And make all the millionaire’s, and the billionaire ‘s pay for the free ride they’ve been getting……even if we have to start from the beginning again.
Yeah, work is slaves to death why don’t you, considering a good percentage of people finally reaching retirement age find out they have cancer and are dead within a year .So fuck off and work the worthless next generation instead.
Well they didn’t want a woman in the White House so they got just what they asked for so the president is making America great again 👍🏽
Trump will always be ahead why…like playing cards that 5th card is a TRUMP,
this man has no heart and yet he breaths the same air you and I do.
TRUMP is exactly that a TRUMP regardless of the facts, figures, truth. Hope he not going be Pres. again, this is the way of the world…the man with the money wins, especially with a TRUMP
Where is the money going to ,it sure is not going to me I need help now but I’m not going to beg for what I work for all my life
Well I turn 62 in 11 more years & I fully plan on continuing to retire from where I currently work regardless of age change. The fact is people don’t retire because they’re lazy. They do it because they’re tired. Maybe they feel like they’ve done what they do for a living long enough. Maybe there is health issues. Maybe they want to enjoy life before death for a change. We don’t know how long we have to live after retirement. Some people live a long time & some others don’t. I might try to find something part time to do with myself if for no other reason just to stay somewhat active for as long as I can but that’s about it. Just my plan & view on the subject. It’s a shame they would try to force people into working longer.