Many Americans still think 67 is the ideal SSA age for retirement, but that’s no longer the case. Starting in 2025, Social Security’s “Full Retirement Age” (FRA) is being raised again, affecting the retirement plans of millions of working-age adults.
The change is part of a longer government plan to adjust Social Security benefits to accommodate people’s growing lives and changing financial needs. If you’re nearing retirement or helping a loved one retire, this information is important to know.
What is Full Retirement Age (FRA)?
Full retirement age is the age at which you can collect your full Social Security benefit without any reduction. You can start taking Social Security benefits as early as 62, but this permanently reduces your monthly benefit. The longer you wait (up to age 70), the higher your monthly benefit.
Why did the retirement age change over the years?
Earlier the retirement age for everyone was 65 years. But in 1983, the US Congress decided that the FRA would be gradually increased so that the social security system could be kept financially stable. The reason was – people have started living longer now, due to which the government has to give them pension for a longer period. To maintain this balance, the retirement age was also increased.
After this, every few years the FRA was increased by two months depending on the year of birth.
A history of Social Security’s retirement age:
| Year of Birth | Full Retirement Age (FRA) | Notes |
|---|---|---|
| 1937 or earlier | 65 | Original retirement age |
| 1938 | 65 years and 2 months | Start of increase |
| 1943–1954 | 66 | New standard FRA |
| 1955–1959 | 66 years and 2 to 10 months | Gradually increased toward 67 |
| 1960 or later | 67 | Final set retirement age |
What’s new in 2025?
Starting in 2025, people born in 1959 must wait until age 66 years and 10 months to receive full Social Security benefits. That’s 2 months longer than people born in 1958, whose FRA was 66 years and 8 months.
This means that people born in 1959 will become eligible for their full retirement benefits in November 2025.
Can you claim Social Security early?
Yes, you can start taking Social Security benefits at age 62. But the downside is that your monthly benefit is permanently reduced by about 30%. Many people choose to take benefits early if they need income sooner, but the reduction is permanent.
If you start taking benefits a few months before FRA, there is still a small reduction, but less than at age 62. If you wait and take benefits at age 70, your monthly amount could increase even more.
What are the benefits of claiming late?
For example: If someone claims Social Security at FRA in 2024, they could receive about $3,822 per month. But if that same person claims at age 62, they would only receive $2,710 per month. The difference could be huge over the long term.
If a person waits until age 70, their benefits can increase by about 25%, improving financial security in retirement. However, only 4% of people claim this late.
Cost-of-Living Adjustment (COLA) in 2025
Each year, Social Security payments are adjusted for inflation, called a COLA (Cost-of-Living Adjustment). The COLA for 2025 is set at 2.5%, the smallest increase since 2021. The increase will be reflected in payments starting in January 2025.
Who will be most affected?
The change will affect junior baby boomers (born 1959-1964) and Generation X. Those born in 1960 or later will have to wait until age 67 to receive full benefits. This means that people born in January 1960 will be eligible for full retirement only in January 2027.
Concerns about retirement savings
Many junior baby boomers and Generation X people today do not have enough savings for retirement. According to a study, about 1 in 3 junior baby boomers get 90% or more of their income from Social Security at age 70. But Social Security is only designed to cover an average of 40% of income.
The situation of Generation X is also worrying. An average Gen X family has only $150,000 in savings, while experts say $1.5 million is needed for a comfortable retirement. Surprisingly, about 40% of Gen Xers have no retirement savings at all.
Conclusion
The change in Social Security’s full retirement age in 2025 may seem small, but its impact could be profound. If you were born in 1959, you now have to wait until age 66 years and 10 months to receive full benefits. Claiming early will result in a permanent reduction, while claiming late will give you a higher benefit.
Since many Americans are not fully prepared for retirement, especially Gen X and junior baby boomers, it’s more important than ever to understand these rules. If you plan properly now, retirement life can be more secure and stress-free.
FAQs
1. What is the new Social Security retirement age announced by the SSA?
The SSA (Social Security Administration) has confirmed that the full retirement age will change starting in April 2025. However, the exact new age depends on your birth year. More details will be provided by SSA closer to the implementation date.
2. When will the new retirement age take effect?
The new retirement age rules are set to take effect starting April 2025, as per the SSA’s recent announcement.
3. Will this change affect people who are already receiving Social Security benefits?
No, individuals who are already receiving their Social Security retirement benefits will not be impacted by the change.
4. Who will be affected by the new retirement age rule?
Primarily, people not yet retired and born in later years (post-1960) may be affected. The SSA will release specific eligibility details.
5. Why is the SSA changing the retirement age?
The change is part of broader efforts to ensure the long-term sustainability of the Social Security program as life expectancy increases and demographic trends shift.
