Is the Social Security retirement age increasing in 2025?
Yes, the Social Security full retirement age (FRA) is scheduled to increase in 2025 for individuals born in 1959. This increase is not new legislation, but the next step in a phased adjustment mandated by the 1983 Social Security Amendments, which gradually raised the FRA from 65 to 67 due to increased life expectancy. For those born in 1959, the FRA in 2025 will be 66 years and 10 months. This is two months older than for those born in 1958. For individuals born in 1960 or later, the FRA is 67, completing this phase-in.
The history behind the gradual increase
The 1983 amendments increased the FRA from 65 primarily to address concerns about the long-term financial stability of the Social Security program. The phased approach aimed to give individuals time to adjust their retirement plans.
What an increasing full retirement age means for you
The FRA is the age you become eligible for 100% of your Social Security benefits. However, you have options for when to claim:
- Early claiming: You can claim benefits as early as age 62, but this results in a permanent reduction in your monthly payment. For those with an FRA of 67, claiming at 62 means about a 30% lower monthly benefit.
- Full retirement age: Claiming at your specific FRA provides 100% of your earned benefit.
- Delayed claiming: Waiting to claim past your FRA, up to age 70, increases your monthly payment by 8% for each year you delay. This maximizes your monthly benefit but requires other income sources until age 70.
The early vs. delayed claiming decision
The choice of when to claim depends on factors like your health, finances, and life expectancy. The table below compares the outcomes:
| Claiming Strategy | Age When Claiming | Benefit Amount | Key Considerations |
|---|---|---|---|
| Early | As early as 62 | Permanently reduced | Provides immediate income but a lower lifetime payment. |
| Full Retirement Age | Based on birth year (e.g., 66 and 10 months for 1959 births) | 100% of earned benefit | The standard benchmark, higher than early claiming but less than delayed. |
| Delayed | Up to age 70 | 100% plus 8% annual credit | Maximizes monthly payments for those who can wait and have longer life expectancies. |
Planning for future potential changes
While the current scheduled increase completes the 1983 plan, discussions continue regarding potential future increases to the FRA beyond 67 to address the program's long-term financial health. Though not enacted for 2025, these discussions highlight the need for flexible retirement planning.
Conclusion
For those born in 1959, the full Social Security retirement age will increase in 2025 to 66 and 10 months, as part of a pre-planned change, not new legislation. For those born in 1960 or later, the FRA is 67, finalizing this phased increase. Your decision on when to claim benefits significantly impacts your retirement income. Understanding these changes and planning accordingly, including reviewing your personalized benefit estimates, is crucial for making informed choices that align with your financial needs and goals. The official Social Security Administration website offers more details on retirement benefit calculations.
How to prepare for the change
- Find your FRA: Determine your specific full retirement age using the official Social Security Administration's planner based on your birth year.
- Evaluate your claiming options: Create a my Social Security account for a personalized benefit estimate and to see how claiming at different ages affects your payment.
- Assess your financial position: Consider your savings and other assets, and how different benefit amounts impact your overall finances.
- Factor in longevity: A longer life expectancy might make delaying benefits more advantageous for a higher cumulative payout.
- Review other Social Security updates: Stay informed about annual changes like cost-of-living adjustments (COLA) and taxable earnings limits, which also affect benefits.
