Planning for retirement is one of the biggest financial decisions in life. A key factor is knowing the exact age when you can claim your full Social Security benefits. For many years, people assumed this age was 65.
However, the rules have changed, and from 2025, a new retirement age will apply to certain groups. This small adjustment may seem minor, but it can have a big impact on your financial future.
What is the new Social Security retirement age?
The change is not sudden. It comes from the 1983 Social Security Amendments, which gradually increased the Full Retirement Age (FRA) over time.
For people born in 1959, the FRA is 66 years and 10 months.
For those born in 1960 or later, the FRA is now 67 years.
This means if you were born in or after 1960, you will need to wait until 67 to claim your full, unreduced benefits.
What happens if you retire early?
Many people still choose to retire early at age 62, but doing so has financial consequences. The change in FRA directly affects how much money you’ll actually receive.
Born in 1959: Retiring at 62 leads to about a 29% reduction in monthly benefits.
Born in 1960 or later: Retiring at 62 results in a 30% reduction.
This reduction is permanent, meaning your checks will always be smaller compared to waiting until your FRA.
Tips for those considering early retirement
If you plan to retire early, financial experts suggest a few strategies to reduce the burden:
Withdraw from taxable accounts first to let retirement accounts like 401(k)s and IRAs grow longer.
Keep your modified adjusted gross income (MAGI) low, which may help reduce taxes on Social Security.
Consider side hustles such as freelancing, consulting, or part-time work to maintain steady income.
Why this matters for your retirement planning
The increase in FRA highlights the importance of understanding how timing affects your benefits. Even waiting one or two extra years after FRA can increase your Social Security checks significantly, thanks to delayed retirement credits. On the other hand, rushing to claim early may leave you with less financial security in old age.
From 2025, people born in 1959 and later will see changes in their full retirement age under Social Security. While the difference may look small, the impact on benefits can be large—especially for those who retire early.
Knowing your exact FRA, planning carefully, and considering smart strategies like managing taxable income and exploring side hustles can make a huge difference in ensuring financial stability in retirement.
