The Social Security Administration (SSA) has recently confirmed a significant shift in the retirement policy, which could impact millions of Americans. Starting this year, the Full Retirement Age (FRA) has officially been raised to 67 for individuals born in 1960 or later. This change is a final step in a gradual adjustment process that began in 1983 when amendments to the Social Security Act set a plan to push the FRA from 65 to 67.
Up until last year, those born in 1959 had a retirement age of 66 years and 10 months. But, as of 2025, anyone born in 1960 or later will have to wait until age 67 to qualify for their full Social Security retirement benefits.
It’s worth noting that more than 70 million Americans currently receive Social Security benefits, and the SSA estimates that around 10,000 people reach retirement age every single day. This change will affect around 3 million people who are in their early 60s and are preparing for retirement in 2025.
Can You Claim Early Benefits?
Despite this shift, early retirement is still an option, but it comes at a price. You can begin claiming benefits at age 62, but doing so means you’ll receive a reduced monthly payment for the rest of your life. Specifically, for those whose FRA is now 67, retiring at 62 will result in a 30% permanent reduction in monthly benefits. That’s a pretty big chunk compared to individuals born before 1960.
The SSA has provided a breakdown of how early claims affect monthly benefits:
| Claiming Age | Monthly Benefit (% of FRA) |
|---|---|
| 62 | 70% |
| 63 | 75% |
| 64 | 80% |
| 65 | 86.7% |
| 66 | 93.3% |
| 67 | 100% |
On the flip side, if you decide to delay claiming benefits past your FRA, you can actually increase your monthly payments. The SSA offers Delayed Retirement Credits, which boost your monthly payments by roughly 8% per year, up until age 70. So, if you’re willing to wait until you’re 70, you could be looking at 124% of your full benefit amount.
A Personal Decision
With these changes in mind, the SSA encourages future retirees to carefully weigh their options before filing for Social Security. As the SSA puts it, “There are pros and cons to claiming early or late. Each situation is unique.” This is definitely something that requires some thought, especially since there are financial consequences attached to whichever route you choose.
There are still important eligibility rules to keep in mind. For instance, you need to be 62 for a full calendar month before applying. Also, benefits are calculated monthly rather than annually, so there won’t be any retroactive payments if you claim early.
Why the Change?
The increase in the FRA is part of a broader strategy to ensure the long-term sustainability of the Social Security Trust Fund. According to the 2024 Trustees Report, the fund is projected to run out by 2034 unless significant changes are made. By raising the FRA and encouraging people to delay claiming benefits, the SSA hopes to reduce the strain on the fund without resorting to cuts or raising payroll taxes.
Ultimately, the idea is to have people work a bit longer before accessing full benefits, which reduces the total amount paid out in benefits and shrinks the time over which benefits are collected. It’s a way to preserve the system, though it may require more planning and consideration for those nearing retirement.
As the rules evolve, individuals born in 1960 or later are now faced with a new reality for their post-work plans. This adjustment might feel like a hassle for some, but it’s a shift that could have a significant impact on the way future retirees approach their financial future.
