The age for retiring with full Social Security benefits is getting older. This is going to affect a lot of people who are planning for retirement. People are going to have to rethink their plans to retire at 67 and get full benefits. The Social Security Administration is updating rules and policies for the year 2025 and onward. These future retirees need to know what the changes are, the reasoning behind those changes, and how to come up with a plan to deal with the changes.
Why is the retirement age getting older?
The social expectations of life now and the reality of the Social Security system operating at a surplus are the main reasons for the adjustment to the retirement age. When Social Security started in 1935, the retirement age of 65 was instituted, but during that time people rarely lived past their early 60s, so it was little of a burden on the system. The societal advancements brought the life expectancy to the 80s and beyond, thus significantly increasing the burden. This is why the lawmakers have to slowly increase the Full Retirement Age (FRA). FRA for those born in 1960 and onward is 67.
What Do the New Rules Say?
Beginning in 2025, anyone born in 1960 will reach full retirement benefits only at 67, completing a phase-in that began ages ago where the starting point was 65. For those born in 1959, FRA is 66 years and 10 months. For early retirees—those claiming benefits at 62—are subject to a full monthly reduction, which is 30% less than the benefits at FRA.
Your Options: Early, Full, or Late Retirement
Retirees still have options. Benefits can start as early as age 62, but those payments will not be fully available. For example, claiming retirement checks at FRA will be $1000, while claiming at 62 will be $700. On the other hand, retirement can be delayed after FRA to age 70, which will increase the checks by 8% for each year waited. This increase can be up to 24% over 3 years.
The Impact of ‘Silver Tsunami’
As almost 4 million Americans hit 65 in 2025, this will add pressure to Social Security’s finances. This is because the retirement age and benefits have to be redefined. This is lessening the impact of the ‘Silver Tsunami’, but it also requires more planning from the employees who are close to retirement.
Future Adjustments and Financial Planning
More changes are likely within Social Security, as proposals suggest raising the FRA even higher for young cohorts—potentially 70 for those born after 1970. The debate on how to best protect Social Security continues. The SSA encourages individuals to use their online calculators and rethink their retirement savings and claiming strategies.
| Birth Year | Full Retirement Age (FRA) |
|---|---|
| Before 1959 | 65–66 years |
| 1959 | 66 years, 10 months |
| 1960 or later | 67 years |
FAQs
Q1: Can retirement benefits be claimed at 62?
Yes, but they will be permanently reduced, up to 30% lower than what you will receive at full retirement age.
Q2: Will the FRA increase again in the future?
It’s possible. There are proposals for the FRA to rise to 68, 69, or even 70 for younger people.
Q3: Does claiming benefits later always mean bigger checks?
Yes, benefits increase about 8% each year on the months you wait after your full retirement age up to 70 years old.
