For generations, the age 65 was stamped into the American psyche as the magic number for retirement. That was when Social Security kicked in at full strength, Medicare began, and workers finally stepped away from decades on the job. But the rules of the game have changed. Thanks to reforms dating back to the 1980s, the full retirement age (FRA) is no longer a fixed 65. By 2025, it has shifted again—subtly but significantly—forcing millions of near-retirees to rethink their plans.
For those born in 1959, the FRA is now 66 years and 10 months. And anyone born 1960 or later faces a new reality: 67 is the official benchmark. On paper, it’s just a few extra months. In practice, it can mean thousands of dollars lost—or gained—depending on when you claim.
What’s Changing in Social Security’s Full Retirement Age?
The 1983 Social Security Amendments kicked off a gradual increase in the FRA to help shore up the system’s finances. Rather than a sudden jump, lawmakers phased in the change in two-month increments tied to birth years.
| Birth Year | Full Retirement Age |
|---|---|
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960+ | 67 years |
Here’s the catch: you can still file for Social Security as early as 62, but the penalty is steep and permanent.
- For those born in 1959, claiming early cuts benefits by roughly 29%.
- For those born in 1960 or later, the reduction is about 30%.
Conversely, delaying past FRA boosts benefits by 8% a year until age 70—a potential 32% increase for those who can wait.
How to Bridge the Gap Before Reaching Full Benefits
Plenty of Americans dream of retiring earlier than 67. But leaving the workforce before full benefits kick in means plugging income gaps strategically. These options can help:
Phased Retirement
Instead of a hard stop, negotiate reduced hours—say, three or four days per week. Even 15–20 hours can cover essentials and preserve savings.
Build a Cash Runway
Advisors suggest stashing 18–24 months of living expenses in a high-yield savings or money market account. That cushion keeps you from selling investments during market dips.
Monetize Unused Assets
- Rent out a spare room for $700–$1,000/month
- Lease urban driveway space for $150–$300/month
- Explore Airbnb or storage rentals for supplemental income
Bridge Jobs with Benefits
Retailers like Costco, Trader Joe’s, or Home Depot often provide health coverage to part-timers working 20–28 hours weekly. A win-win for early retirees.
Tax-Efficient Withdrawal Strategies
If you’re retiring before 65 or holding out on Social Security, you’ll rely heavily on personal savings. Being tax-smart matters:
- Tap taxable accounts first to give retirement funds more time to grow.
- Use Roth IRA contributions (not earnings), which can be withdrawn tax- and penalty-free at any age.
- Keep MAGI low to qualify for Affordable Care Act subsidies, which can save thousands on health insurance before Medicare eligibility.
Side Income Options
Small income streams can stretch savings and add purpose. Popular choices include:
- Tutoring: $30–$50 per hour
- Dog walking/pet sitting
- Crafts or Etsy sales
Even $500 a month in side income can reduce withdrawals and extend portfolio life.
Planning for Possible Future Changes
While the FRA tops out at 67 today, proposals to raise it to 68 or 69 are gaining traction in Washington as Social Security faces projected shortfalls in the 2030s. No law has passed yet, but it underscores the need for flexibility.
How to Prepare
- Keep a flexible retirement plan that anticipates delayed benefits.
- Build emergency savings and alternative income streams.
- Review your strategy annually as policies evolve.
FAQs:
What is the full retirement age for people born in 1959?
It’s 66 years and 10 months, effective in 2025.
What happens if I claim Social Security at 62?
You’ll face a permanent benefit cut of about 29–30% depending on your birth year.
Is there a benefit to delaying Social Security beyond FRA?
Yes. Each year you delay up to age 70 increases benefits by 8%, for up to a 32% boost.
