The traditional retirement age of 65 is slowly becoming history for Americans. Starting in 2025, the Social Security Full Retirement Age (FRA) for people born in 1959 will rise to 66 years and 10 months.
While it’s only a two-month increase from last year, this change could have a big impact on when you retire and how much money you get each month from Social Security.
Understanding these changes and planning ahead can help you avoid losing thousands of dollars over your lifetime.
What Exactly Changed in 2025?
The new age rule comes from the 1983 Social Security Amendments, which have been slowly raising the FRA from 65 to 67 in small two-month steps for each birth year.
Here’s the updated Full Retirement Age table:
| Year of Birth | Full Retirement Age (FRA) |
|---|---|
| 1958 | 66 years and 8 months |
| 1959 | 66 years and 10 months (new for 2025) |
| 1960 or later | 67 years |
If you were born in 1959, you must wait two extra months compared to people born in 1958 to receive your full Social Security benefit.
Claiming Benefits Early – The Cost
You can still claim Social Security benefits as early as age 62, but doing so comes with permanent reductions.
- Born in 1959: Around 29% less every month.
- Born in 1960 or later: Around 30% less every month.
For example:
If your FRA benefit is $2,000/month, claiming at 62 could drop it to $1,420–$1,400/month.
Delaying Benefits – The Reward
If you wait past your FRA, you can increase your monthly payout by up to 8% per year, with a maximum boost of 32% if you claim at age 70.
Bridging the Gap Before FRA
If you want to stop working before reaching your FRA, you need strategies to keep your finances stable.
1. Phased Retirement
Ask your employer for a reduced work schedule—for example, 3–4 days a week.
Even 15 hours/week can help cover basic expenses like groceries and health insurance premiums.
2. Build a Cash Runway
Save 18–24 months of living costs in a high-yield savings account or money market account to avoid selling investments when markets are down.
3. Monetize Extra Space
Rent unused rooms in your home for $700–$1,000/month or lease your driveway in urban areas for $150–$300/month.
4. Part-Time Jobs with Benefits
Some companies like Costco, Home Depot, and Trader Joe’s offer medical benefits for part-time workers (20–28 hours/week) until you qualify for Medicare at 65.
Tax-Smart Strategies for Early Retirement
If you need income before FRA, focus on minimizing taxes.
- Withdraw from taxable accounts first to allow 401(k)s and IRAs to keep growing.
- Use Roth IRA contributions (not earnings) tax- and penalty-free at any age.
- Keep your Modified Adjusted Gross Income (MAGI) low to qualify for Affordable Care Act health subsidies.
- Earn side income from tutoring, pet sitting, or selling crafts to avoid draining savings.
Future Retirement Age Changes
The FRA increase to 67 is almost complete, but some lawmakers want to push it to 68 or even 69 in the future.
No law has passed yet, but planning for flexibility is key—this could mean working part-time longer or saving more aggressively.
Why This Matters
Even a few months difference in claiming Social Security can affect your lifetime earnings.
By combining cash savings, part-time income, and tax-efficient withdrawals, you can choose when to retire instead of letting the system decide for you.
The 2025 Social Security FRA increase is part of a long-term plan to adjust retirement benefits for longer life expectancy. Whether you choose to retire early, wait until your FRA, or delay until age 70, the key is understanding the financial impact.
Careful planning, saving, and strategizing can help you retire comfortably and maximize your benefits, even with a later retirement age.
FAQs
What is the new full retirement age in 2025?
For people born in 1959, the FRA is 66 years and 10 months. For those born in 1960 or later, it’s 67 years.
How much less will I get if I retire at 62 in 2025?
Around 29–30% less every month compared to waiting until your FRA.
Is delaying Social Security worth it?
Yes. Waiting until age 70 can increase your monthly benefit by up to 32%.