The Social Security full retirement age (FRA) is set to rise again in 2025, affecting millions of Americans born in 1959 and later. Those born in 1959 will see their FRA increase to 66 years and 10 months, while individuals born in 1960 or later will face an FRA of 67. These changes are part of a gradual adjustment process that began with the 1983 amendments to the Social Security Act.
The goal is to reflect longer life expectancies and ease the financial burden on the Social Security system. Americans can still claim benefits as early as age 62, but doing so will result in reduced monthly payments. For those born in 1960, claiming early at 62 will lead to a 30% reduction in benefits.
Full retirement age increasing again
On the other hand, delaying benefits past one’s FRA could result in higher payouts, increasing by up to 8% per year until maxing out at age 70. The increased FRA comes as Social Security faces mounting funding pressures.
Projections suggest that, without reforms, the program’s trust funds could be depleted by 2034, potentially leading to benefit cuts. President Trump’s recent tax bill includes provisions that may provide some relief to older Americans, such as a temporary enhancement of the standard tax deduction for individuals aged 65 and older. However, critics argue that further increases in the FRA could disproportionately impact those in physically demanding jobs or with lower life expectancies.
As the debate over Social Security reforms continues, it is crucial for future retirees to stay informed and proactive. The Social Security Administration provides tools and personalized benefit estimates to help Americans understand how these changes could impact their financial futures.
