For decades, retirement in the United States has been tied to the age of 65. But starting in 2025, that age no longer lines up with when you can collect full Social Security benefits. If you were born in 1959, your full retirement age (FRA) is now 66 years and 10 months—and for anyone born in 1960 or later, it’s officially 67. The shift is part of a long-term adjustment to Social Security that’s now reaching its final stages.
This change also impacts how much you’ll get each month, when you can afford to retire, and how you need to plan. Here, we’ll walk through what’s changing with the full retirement age and what you can do to prepare. We’ll also offer practical ways to bridge the gap if you plan to stop working before you hit that new FRA.
What’s happening with the retirement age
The full retirement age has been creeping up for years. This was set in motion by a law passed in 1983 that gradually raised the FRA from 65 to 67 in two-month steps. Now that the law is nearing full effect, people born in 1959 will need to wait until 66 years and 10 months to get their full Social Security benefit. If you were born in 1960 or later, the FRA is a firm 67.
These changes are meant to reflect longer life expectancy and reduce pressure on the Social Security system, and they do come with trade-offs. Retiring early at 62 is still an option, but it means taking a permanent cut to your monthly benefits—around 29% to 30%, depending on your birth year. On the flip side, delaying benefits past your FRA boosts your payments by about 8% per year, up to age 70.
How to plan around the new retirement age
Adjusting your retirement plans to fit the new FRA takes some strategy. Whether you want to stop working early or just make the most of your benefits, here are some steps to consider:
- Build a cash buffer: Save enough to cover at least 18 to 24 months of living expenses before tapping into Social Security. A high-yield savings or money market account works well for this.
- Work part-time with purpose: Look for part-time jobs that offer health benefits to employees working 20–28 hours a week. That can save you thousands before Medicare kicks in at 65.
- Consider phased retirement: If your job allows it, cut back your hours gradually. A three or four-day workweek can help you stretch your savings and delay claiming benefits.
- Use taxable accounts first: If you retire early, start by pulling from regular investment accounts. This lets tax-deferred accounts like 401(k)s or IRAs keep growing.
- Tap Roth contributions: Roth IRA contributions (not the earnings) can be withdrawn tax and penalty-free. It’s a flexible option to cover gaps without adding to your taxable income.
- Watch your income level: Keeping your income low can qualify you for health insurance subsidies under the Affordable Care Act. This can make a big difference in bridging the years before Medicare.
- Make extra money on the side: Simple side gigs like tutoring or renting out a spare room can bring in income without locking you into full-time work.
Every plan will look a little different, but the goal is the same: give yourself more control over when and how you retire. With the right planning, you can set your own timeline, regardless of what Social Security says.