For the first time since the creation of Social Security nearly 90 years ago, the full retirement age (FRA) in the United States is set to reach 67. Beginning in 2026, individuals born in 1960 or later will need to wait until they turn 67 to receive their full Social Security benefits.
This change is part of a long-term shift in the program that reflects changing economic and demographic factors. Let’s explore why this is happening, what it means for future retirees, and how it could affect you.
The History and Purpose of Social Security
Social Security was signed into law by President Franklin D. Roosevelt in 1935, during the Great Depression, as a way to provide income support to seniors aged 65 and older. Over the years, it has become one of the most important social safety nets in American history, helping millions of retirees maintain financial stability.
However, as the economy and demographics have evolved, the Social Security system has faced increasing challenges. Originally, there were around 42 workers for every person receiving benefits.
By the 1980s, that ratio had sharply dropped, and today, only about 2.7 workers support each retiree. These changes, combined with a rising life expectancy, are putting significant pressure on the program’s funding.
Why Is the Full Retirement Age Increasing?
The increase in the FRA is not a sudden or unexpected decision. It is the result of a major reform passed in 1983 under President Ronald Reagan. At that time, lawmakers began to gradually raise the FRA from 65 to 67 to help address the growing financial pressures on Social Security.
The program was designed during a time when people did not live as long. Back then, life expectancy was much lower, and most people didn’t live past 61. Today, many Americans live well into their 70s or even 80s, meaning they draw Social Security benefits for a longer period. As life expectancy increases, the system has to adjust to ensure it remains financially sustainable.
What Does This Change Mean for You?
Starting in 2026, individuals born in 1960 or later will need to wait until age 67 to receive 100% of their Social Security benefits. Those who choose to retire earlier will face a reduction in their monthly payments.
For example, if you decide to start receiving benefits at age 62, which is the earliest possible age for Social Security retirement, your monthly check will be significantly smaller than if you waited until 67.
The decision of when to retire depends on several factors beyond just the financial aspect. Health, job satisfaction, lifestyle preferences, and family history all play a role in this important decision.
While many people look forward to retirement, the increase in the FRA places a greater burden on individuals to figure out how to support themselves longer.
The Looming Financial Crisis and Uncertainty
One of the biggest concerns for future retirees is the potential for a reduction in Social Security benefits. Federal projections show that the Social Security trust funds could run out by 2034. If Congress does not intervene, retirees may face an across-the-board cut in benefits of 20% or more just to keep the program functioning.
This funding shortfall adds urgency to questions about the future of Social Security and whether today’s workers will be able to rely on the same level of support as current retirees.
As costs rise and the FRA increases, more responsibility is being placed on individuals to figure out how to save for retirement. It’s possible that lawmakers will act to prevent a crisis, but until that happens, uncertainty looms over the program’s future.
With the goalposts constantly shifting, many workers find themselves unsure about when they’ll be able to retire and how much support they’ll get from Social Security.
The rise in the full retirement age to 67 is a sign of the times and reflects the changing realities of life expectancy and workforce demographics. While this change may seem like a small adjustment, it has significant implications for anyone planning to rely on Social Security for their retirement.
With the program facing financial challenges and uncertainty about future funding, it’s important for today’s workers to plan ahead and consider their options for retirement carefully.
Whether you choose to retire early or wait until you reach the new FRA, the key will be to take action now to ensure financial security in the years to come.
