For decades, Americans have viewed age 65 as the traditional retirement milestone. But due to gradual legislative changes, full retirement age (FRA) for Social Security benefits is shifting upward. For those born in 1959, FRA will be 66 years and 10 months starting in 2025, while individuals born in 1960 or later face a full retirement age of 67. Though these changes may seem small, they carry real financial implications—especially for those considering early retirement.
Here’s what the rising FRA means, and how to build a strategy that ensures financial security no matter when you stop working.
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What’s Changing in Social Security’s Full Retirement Age?
The 1983 Social Security Amendments began a phased increase in FRA from 65 to 67. The goal was to address the long-term solvency of the Social Security system. This adjustment rolled out in two-month increments, depending on birth year.
| Birth Year | Full Retirement Age |
|---|---|
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960 or later | 67 years |
Those who choose to retire before their FRA can claim Social Security starting at age 62, but at a permanent reduction to benefits. For the 1959 cohort, early filing results in roughly a 29% cut to monthly payments. For those born in 1960 or later, the reduction reaches 30%.
On the flip side, delaying benefits past FRA offers an 8% annual increase, up to age 70. This can translate to a 32% larger monthly benefit, which can make a significant difference over time.
How to Bridge the Gap Before Reaching Full Benefits
Many workers want to retire before FRA, but doing so without a plan could jeopardize long-term finances. Here are some realistic strategies to fill the income gap between early retirement and full Social Security benefits:
Phased Retirement
Negotiate a reduced schedule at your current job—three or four days per week. Even 15–20 hours weekly can cover essentials and preserve savings.
Build a Cash Runway
Financial planners recommend saving 18–24 months of living expenses in a high-yield savings or money market account. This provides stability without needing to draw down investment accounts during market volatility.
Monetize Unused Assets
If you own a home with unused space or parking:
- Rent out a room for $700–$1,000/month
- Lease driveway space in urban areas for $150–$300/month
Bridge Jobs with Benefits
Part-time work at companies like Costco, Home Depot, or Trader Joe’s can provide income and medical coverage for employees working 20–28 hours a week. These roles are ideal for early retirees seeking flexibility and benefits.
Tax-Efficient Withdrawal Strategies
Retiring before 65 or delaying Social Security means you’ll need to rely on personal savings. Smart withdrawal choices can reduce taxes and stretch your money further:
Tap Taxable Accounts First
Withdraw from brokerage accounts before dipping into retirement accounts to avoid penalties and allow tax-advantaged accounts more time to grow.
Use Roth IRA Contributions
Withdraw contributions (not earnings) from Roth IRAs tax- and penalty-free at any age. This is a valuable zero-tax source of income.
Keep MAGI Low
Maintaining a low Modified Adjusted Gross Income (MAGI) helps qualify for Affordable Care Act subsidies, which can save thousands annually on health premiums before age 65 (Medicare eligibility).
Consider Side Income
Part-time self-employment or gig work can provide modest income without the commitment of a full-time job:
- Tutoring: $30–$50/hr
- Pet sitting or dog walking
- Craft sales or Etsy stores
Planning for Possible Future Changes
While FRA is currently maxed out at 67, proposals have been floated to raise it to 68 or even 69 in response to Social Security funding pressures. No new laws have passed, but the debate continues in Washington.
How to Prepare:
- Keep a flexible plan that accounts for delayed benefits
- Build emergency savings and alternative income streams
- Regularly review your retirement income strategy as policies evolve
Final Thoughts
The slow increase in Social Security’s full retirement age may feel like a technical adjustment, but for millions of Americans, it alters the financial roadmap to retirement. Planning ahead—through savings, flexible work, and tax-savvy withdrawals—is more important than ever.
Retirement shouldn’t be defined by a government schedule. With a solid plan in place, you can retire when you’re ready—on your own terms.
FAQs:
What is the full retirement age for someone born in 1959?
It’s 66 years and 10 months, effective in 2025.
How much are Social Security benefits reduced if I retire early?
For those born in 1959, retiring at 62 results in a 29% reduction in monthly benefits.
Can I work part-time and still collect Social Security?
Yes, but if you claim benefits before FRA and earn over the earnings limit, your benefits may be temporarily reduced.
Should I delay benefits until age 70?
If you’re healthy and have other income, waiting until 70 offers maximum monthly benefits, increasing your lifetime payout.
