When planning for retirement, one of the most important considerations is the age at which full Social Security benefits are available. For years, it was assumed that the average age was 65, but this has changed with a recent update.
Beginning in 2025, this figure will rise for a specific segment of the population, raising concerns and even confusion among those approaching this stage of life. Understanding this small adjustment is critical for making informed decisions and maintaining financial stability in old age.
What will the new Social Security retirement age be?
The increase in the full retirement age is not a new policy. It is part of a long-term plan outlined in the 1983 Social Security Amendments.
This adjustment has a direct impact on people born in 1959. This group’s full retirement age (FRA) has been set at 66 years and 10 months. Those born in 1960 or later must wait until age 67 to receive their full, unreduced benefits.
What happens if you retire before full retirement age?
The change in FRA is significant for those who choose early retirement and begin receiving benefits at the age of 62. For those born in 1959, early retirement means a 29% reduction in monthly benefits. For people born in 1960 or later, the reduction is even greater, reaching 30%.
Recommendations for early retirement
If a person wishes to take early retirement, the authorities make the following recommendations:
Withdraw from taxable accounts.
Keep your modified adjusted gross income low.
Side hustles: If you need extra income, consider side jobs.
