For those born on in 1960 or later the Social Security Full Retirement Age (FRA) will increase to 67 in 2025. This change will affect million who are approaching retirement. By this adjustment which is a increase from the traditional age 65 means that people now have to wait longer to receive their full retirement benefits. At age 62, early retirement is still feasible, but the monthly payments will be permanently reduced. This change represents the last phase of a gradual change. This change has been developing for decades and represents a larger reaction to the challenges of the Social Security system’s financial sustainability and increased life expectancy.
What is Full Retirement Age (FRA)?
Full Retirement Age is the age at which you are eligible to receive your full & unreduced Social Security retirement benefits. A lot of people are still thinking that FRA is still 65 which is not the case. This has been initiated under the 1983 amendments to the Social Security Act.
Social Security Retirement Age Shift in 2025 Overview
| Name of the Blog | Social Security Retirement Age shift in 2025 |
| Full Retirement Age (FRA) | 66 years and 10 months |
| Earliest Claim Age | 62 years |
| Early Claim Penalty | Upto 30% less claim amount at age 62 |
| Credits after delay | +8% for each year past FRA age upto 70 |
| Earning limit under FRA | $23,400 per year |
| Earning limit at FRA | $62,160 per year |
What’s the impact of claiming early vs waiting?
If benefits were claimed at 62, SSA outlines that if someone is eligible for $1000 per month at 67 (FRA) they will only receive $700 per month. This implicates the financial implications implemented by SSA. If the same personnel delay the claiming of the benefit till 70 years then their monthly payment would actually rise to approx $1240. This is stated as per the reports from Newsweek. To encourage longer workforce participation SSA designed this standard incentive. It is also designed to address funding strains on the program.
Eligibility Criteria for Different Date of Births
Here are FRA’s for people born in different years. For people born in 1960 must wait till 67 years for this.
- 1. 66 years of age for people born in 1943-1954
- 2. 66 years and 2 months of age for people born in 1955
- 3. 66 years and 4 months of age for people born in 1956
- 4. 66 years and 6 months of age for people born in 1957
- 5. 66 years and 8 months of age for people born in 1958
- 6. 66 years and 10 months of age for people born in 1959
Before any legislation mandate changes people born in 1960 will have FRA age of 67 only. This will be effective from November 2025. If you are turning 66 this year be aware you might need to wait several months before claiming your benefit. If you do not then you will receive reduced claim.
Why is the Social Security Retirement Age Increasing?
So the main reason behind the increase of social security retirement age is due to good healthcare people are living longer and then claiming benefits for longer years. As lifespan increased, the 1983 law sought to guarantee the long-term viability of the program. This is according to the Social Security Administration.
This change will effect:
1. People born between 1959-64 (they are called Young Baby Boomer)
2. Individuals born between 1965-80, who face an FRA of 67 (they are called Generation X)
3. Future retired people who are already facing savings shortfalls.
How This Will Impact Benefit Amount?
1. Maximum monthly benefit is $3,822 if claiming at FRA in 2025.
2. The maximum monthly benefit will drop to $2,710 if claiming early at the age of 62.
3. You benefits can increase up to 25% more than FRA, i.e, $4,700 per month if you wait till 70 years.
So, inspite of all these incentives, only 4% individuals wait till 70 to maximize their benefits. This data is taken from a study from Transamerica Centre for Retirement Studies.
What You Need To Do?
Here are few important things mentioned below to do, regardless of whether you’re currently qualified or still making plans for retirement in near future:
- To determine your FRA, use the SSA retirement age calculator.
- Use your My Social Security account to view your customized benefit estimate properly.
- If it is financially feasible, think about postponing your claim in order to boost your monthly compensation and get much more benefits.
- If your retirement timetable or timeline along with your your savings plan don’t align, speak with a retirement advisor. This will help you to weigh the pro and cons of everything.
Lastly as we all now know that the FRA increase to 67 has concluded the recent phase of reform still the future of Social Security Retirement age still remains open-ended. Anything can happen in future and there is no guarantee. The system faces a mountain load of demographic and fiscal pressure as more than 4 million people in America is set to turn 65 this year.
Though there is no new legislation is pending right now to further raise the retirement age, but still experts suggest more reforms may be made later. They say that these adjustments could be inevitable as all the lawmakers are weighing solvency measures in the next years.
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Hello! I’m Kaylani , a professional content writer with a knack for breathing life into words. I have been providing high-quality, research-driven content in Sectors like Technology & Personal Finance . With a background in Finance Tech Management , I specialize in turning complex information into engaging content that resonates with a wide.