Karen Minn
For decades, Americans considered age 65 the traditional retirement milestone. But the Social Security Administration has steadily raised the full retirement age (FRA)—and in 2025, the bar officially moves again.
If you’re born in 1959, your FRA becomes 66 years and 10 months, and for those born in 1960 or later, full retirement begins at age 67.
While this change may seem minor, the financial consequences can be significant, especially for people considering early retirement. With further FRA hikes being debated, having a well-rounded retirement strategy has never been more important.
What’s Changing in Social Security’s Full Retirement Age?
The 1983 Social Security Amendments introduced a gradual increase in the FRA to preserve the system’s solvency. These changes are now fully in effect for upcoming retirees.
Full Retirement Age by Birth Year
| Birth Year | Full Retirement Age (FRA) |
|---|---|
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960 or later | 67 years |
You can still start benefits at age 62, but you’ll face a permanent reduction. For example:
- Born in 1959: 29% monthly benefit reduction at age 62
- Born in 1960 or later: 30% monthly benefit reduction at age 62
Alternatively, delaying benefits beyond your FRA increases your monthly payout by 8% per year, up to age 70—resulting in a 32% larger benefit.
How to Bridge the Gap Before Reaching Full Benefits
Many Americans aim to retire early, but the gap between stopping work and claiming full Social Security benefits can create financial strain. These strategies can help bridge that period safely and smartly.
Phased Retirement
Reduce your work schedule instead of stopping entirely. Working 15–25 hours per week can help:
- Maintain employer health coverage
- Cover basic living expenses
- Delay retirement account withdrawals
Build a Cash Runway
Save 18–24 months of expenses in a high-yield savings or money market account. This buffer allows you to avoid drawing from long-term investments during volatile market periods.
Monetize Unused Assets
Make your property work for you:
| Asset | Monthly Earning Potential |
|---|---|
| Rent a spare room | $700–$1,000 |
| Lease driveway/garage | $150–$300 |
| Storage space rental | $100–$200 |
Bridge Jobs With Benefits
Part-time roles at companies like Costco, Home Depot, or Trader Joe’s offer flexibility, income, and even health insurance for employees working as few as 20–28 hours per week.
Tax-Efficient Withdrawal Strategies Before Claiming Social Security
If you retire before age 65 or delay Social Security to maximize benefits, you’ll need income from personal savings. How and when you tap into those savings affects your tax liability and long-term financial health.
Tap Taxable Accounts First
Begin with taxable brokerage accounts to avoid early withdrawal penalties and give your tax-advantaged accounts more time to grow.
Use Roth IRA Contributions
Withdraw contributions (not earnings) from your Roth IRA at any age, tax- and penalty-free—a great zero-tax income source.
Keep MAGI Low for ACA Subsidies
By keeping your Modified Adjusted Gross Income (MAGI) below key thresholds, you can qualify for Affordable Care Act health insurance subsidies, saving thousands in premiums before reaching Medicare eligibility at 65.
Consider Part-Time Income Sources
Supplement retirement savings with low-effort side gigs that provide flexible income:
| Side Hustle | Estimated Earnings |
|---|---|
| Tutoring | $30–$50/hr |
| Pet Sitting | $20–$40/day |
| Craft Sales (Etsy, fairs) | Varies by demand |
| Delivery or Rideshare | $100–$300/week |
Planning for Possible Future Changes
Though FRA is currently capped at 67, there are growing discussions about pushing it even higher—to 68 or 69—as part of long-term solutions to fix Social Security’s funding shortfalls.
How to Prepare for Future Shifts
- Stay flexible with your retirement timeline
- Build emergency savings for unpredictability
- Diversify income sources and keep reviewing your retirement strategy annually
The shift in full retirement age from 65 to 67—and possibly beyond—means that retirement planning in 2025 must adapt. Whether you aim to retire early or delay benefits for a larger payout, smart planning is essential.
Use a combination of cash reserves, part-time work, and tax-efficient withdrawals to maintain financial stability until full benefits kick in. Don’t let government changes dictate your lifestyle—with the right strategy, you can retire on your own terms.
FAQs
Is age 67 still the official full retirement age for Social Security?
Yes—for those born in 1960 or later, age 67 is the official full retirement age. Earlier or later claims adjust your benefit accordingly.
Can I still retire at 62?
Yes, but you’ll receive a reduced monthly benefit—up to 30% less depending on your birth year.
What happens if I delay claiming Social Security past 67?
You earn 8% more per year in delayed retirement credits, up to age 70, increasing your monthly benefit by up to 32%.