As the definition of “retirement age” continues to shift, so does the financial planning required to reach it comfortably. While 65 has long symbolized the golden age of retirement, legislative changes now mean Americans must wait longer for full Social Security benefits. For those born in 1959, full retirement age (FRA) increases to 66 years and 10 months starting in 2025. For anyone born in 1960 or later, FRA rises to 67. These changes, though incremental, have significant financial consequences—especially for early retirees.
Let’s explore what the rising FRA really means and how to build a flexible, income-smart retirement strategy.
Why Full Retirement Age Is Rising
The increase in FRA dates back to the 1983 Social Security Amendments, which aimed to bolster the long-term solvency of the Social Security system. Rather than a sudden change, the law gradually increased the FRA in two-month increments based on birth year.
Here’s how it breaks down:
| Birth Year | Full Retirement Age (FRA) |
|---|---|
| 1955 | 66 years + 2 months |
| 1956 | 66 years + 4 months |
| 1957 | 66 years + 6 months |
| 1958 | 66 years + 8 months |
| 1959 | 66 years + 10 months |
| 1960 or later | 67 years |
This slow-moving shift may seem minor, but it can significantly impact Social Security benefits and how long your personal savings need to last.
Early Retirement? Expect Reduced Benefits
Social Security allows benefits to begin at age 62, but claiming early comes at a cost.
- For someone born in 1959, retiring at 62 results in about a 29% reduction in monthly benefits.
- For those born in 1960 or after, the cut increases to 30%.
On the flip side, delaying benefits beyond FRA offers a delayed retirement credit—an 8% boost per year, maxing out at age 70. That could mean a 32% higher monthly benefit, a major advantage for those with longevity or other income sources.
Smart Ways to Bridge the Retirement Gap
If you plan to retire before reaching FRA, you’ll need a plan to cover living expenses without depleting your nest egg too early. Here are strategies that offer both flexibility and income:
1. Reduce Your Work Hours
Transitioning to part-time work—say 15 to 20 hours a week—can help cover basic expenses. Many older adults negotiate reduced hours with current employers or take on lighter roles.
2. Build a Cash Buffer
Saving 18–24 months of living expenses in a high-yield savings or money market account offers peace of mind. This cushion lets you avoid withdrawing from investment accounts during market downturns.
3. Tap Strategic Income Sources
- Brokerage accounts: Withdraw from taxable accounts first. This can reduce required minimum distributions (RMDs) later and give IRAs more time to grow.
- Roth IRA contributions: Can be withdrawn tax- and penalty-free at any age. Ideal for bridging short-term income needs.
- ACA subsidies: Keep your Modified Adjusted Gross Income (MAGI) low to qualify for Affordable Care Act premium subsidies—potentially saving thousands per year on healthcare before Medicare eligibility kicks in at 65.
4. Pick Up Flexible Work with Benefits
Retail chains like Costco, Trader Joe’s, and Home Depot offer part-time roles that include health benefits for workers clocking 20–28 hours weekly. These jobs are ideal for early retirees who want extra income without losing flexibility.
The Future of FRA: Could It Rise Again?
Though FRA currently caps at 67, policymakers have proposed extending it to 68 or 69 to further support Social Security’s long-term funding. While no legislation has passed yet, the conversation is active—and future changes could affect younger workers planning decades ahead.
Even modest shifts in retirement age can ripple through your financial plans. But with a combination of savings, part-time work, and tax-efficient withdrawals, you can shape your retirement timeline to match your lifestyle—not Washington’s schedule. Planning ahead is the best way to keep your independence and peace of mind intact
FAQs
What is the full retirement age for someone born in 1959?
66 years and 10 months, starting in 2025.
How much will I lose by retiring at 62 if I was born in 1959?
Roughly 29% of your full monthly Social Security benefit.
Can I work while collecting Social Security before FRA?
Yes, but benefits may be temporarily reduced if you exceed the annual earnings limit.
Is it better to wait until 70 to collect Social Security?
If you’re healthy and can afford to wait, benefits increase by 8% annually after FRA, up to age 70.
Will FRA increase again in the future?
Possibly. Proposals to raise it to 68 or 69 are on the table, though no laws have been passed yet.
