Adrian
Big changes are coming to the Social Security retirement system in 2025. For decades, 67 has been the Full Retirement Age (FRA)—the age at which Americans could claim full Social Security benefits.
But starting next year, that age will rise to 68 for people born in 1960 or later, marking a significant policy shift in how Americans approach retirement.
This change is not just symbolic. It’s driven by real economic concerns—rising life expectancy, an aging population, and a projected depletion of the Social Security Trust Fund around 2034.
In response, the federal government is implementing phased changes that could redefine the financial futures of millions.
Why the Full Retirement Age Is Increasing
The Social Security Administration (SSA) is adjusting its rules to extend the program’s solvency. Increasing the Full Retirement Age to 68 means fewer people will be eligible for full monthly benefits at 67, thereby reducing the long-term payouts from the system.
Previously:
- People born 1955–1959 had an FRA between 66 and 67.
- Now, for 1960 and later, FRA will be 68.
Impact on Early and Delayed Retirement
You can still retire as early as 62, but your benefits will be reduced by up to 35%, an increase from the previous 30% reduction for early retirement.
Conversely, delaying retirement past 68 will increase your benefits by 8% per year until age 70.
Let’s take a closer look:
| Retirement Age | Monthly Benefit Impact (for those born 1960+) |
|---|---|
| 62 (Early) | 35% reduction in monthly benefits |
| 68 (Full FRA) | Full benefits |
| 70 (Delayed) | Up to 16% increase in total benefits |
Why This Affects You More Than You Think
These changes have broad implications:
- Working longer becomes the new norm for many.
- Retiring early results in a larger financial hit than before.
- Delaying benefits becomes more attractive but less feasible for those in physically demanding jobs or with health concerns.
The bottom line is that your retirement timeline and income expectations may need a major reset.
What You Should Do Right Now
If you were born in 1960 or after, it’s time to act:
- Recalculate your retirement timeline using the SSA’s online tools.
- Review your savings strategy and consider boosting your 401(k) or IRA contributions.
- Consult with a financial advisor to understand how to bridge the income gap and create a diversified income stream.
- Evaluate options for health insurance, especially if you retire before becoming Medicare eligible at 65.
The shift in Full Retirement Age to 68 marks a historic change in American retirement planning.
While it may seem minor, the impact on monthly benefits, lifetime income, and workforce participation is profound.
Those who prepare now—by adjusting plans, increasing savings, and seeking expert advice—will be in the best position to maintain their desired lifestyle in retirement.
FAQs
Who is affected by the new Full Retirement Age?
Anyone born in 1960 or later will now have to wait until age 68 to receive full Social Security retirement benefits.
Can I still retire at 62?
Yes, but your monthly benefits will be reduced by 35% if you claim early instead of waiting for full retirement age.
What happens if I delay retirement until 70?
Delaying retirement past your Full Retirement Age can increase your monthly benefits by 8% per year, up to a total 16% boost from age 68 to 70.