For years, age 65 was the classic retirement number. But times are changing. Thanks to laws passed back in the 1980s, the full retirement age (FRA) for Social Security benefits has been slowly creeping up. Starting in 2025, those born in 1959 will reach full retirement age at 66 years and 10 months. If you were born in 1960 or later, your FRA is 67.
These aren’t minor tweaks. They can have a big impact on your finances—especially if you’re thinking about retiring early. Let’s walk through what this shift means and how you can build a retirement plan that works, no matter when you decide to stop working.
Changes
Back in 1983, Congress passed a law to gradually raise FRA from 65 to 67. The change wasn’t sudden—it was phased in over time. If you’re wondering where you fall, here’s a quick breakdown:
Full Retirement Age by Birth Year
| Birth Year | Full Retirement Age |
|---|---|
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960+ | 67 years |
If you claim Social Security before your FRA, you can start at age 62—but your benefits are permanently reduced. For example, if you were born in 1959 and file early, expect about 29% less each month. For those born in 1960 or later, that cut grows to 30%.
However, there’s an upside to waiting. If you delay benefits past your FRA, you’ll earn an extra 8% per year—up to age 70. That can mean a monthly check that’s 32% higher than what you’d get at FRA.
Bridge
Many people want to retire before FRA, but that choice comes with a price tag. Here are a few smart ways to fill the income gap and keep your financial life on track.
Phased Retirement
Rather than quitting cold turkey, see if your employer allows reduced hours. Even working three days a week can bring in enough cash to cover basics without touching your savings.
Build a Cash Runway
Financial planners suggest saving 18 to 24 months’ worth of expenses in a high-yield savings or money market account. That cushion helps you avoid tapping investments during market dips.
Monetize Assets
Got a guest room or extra driveway space? Rent it out.
| Asset | Potential Income |
|---|---|
| Room rental | $700–$1,000/month |
| Driveway lease | $150–$300/month |
Benefits
Bridge jobs can be a great in-between step. Companies like Costco, Home Depot, or Trader Joe’s offer part-time roles with benefits for workers putting in around 20–28 hours weekly. That means flexible income and access to health coverage.
Withdrawals
If you’re not yet 65 and waiting on Social Security, you’ll likely need to live off personal savings. But how you do that matters—a lot.
Tap Taxable Accounts First
Withdraw from your brokerage account before dipping into IRAs. This strategy avoids early withdrawal penalties and gives retirement funds more time to grow.
Use Roth IRA Contributions
You can pull out contributions (but not earnings) from Roth IRAs at any age, tax-free. It’s a handy backup income source.
Keep MAGI Low
A low MAGI (Modified Adjusted Gross Income) could qualify you for subsidies under the Affordable Care Act. That alone could save you thousands on health insurance premiums before Medicare kicks in at 65.
Sidejobs
If you’re not ready to stop working completely, consider small side hustles. These don’t just bring in cash—they help keep you active and social.
- Tutoring: $30–$50/hour
- Pet sitting or dog walking
- Selling crafts online (Etsy, Facebook Marketplace)
Planning
So far, 67 is the cap for full retirement age. But that could change. Some proposals in Congress suggest pushing FRA to 68 or even 69 to deal with Social Security’s funding issues. Nothing is final yet, but it’s something to watch.
How to Stay Ready:
- Stay flexible in your retirement plan
- Build up emergency savings and alternative income
- Review your strategy every year, especially as policies evolve
The bottom line? Even a small change in Social Security’s FRA can shift your retirement timeline. With a bit of planning—phased work, emergency savings, and tax-smart withdrawals—you’ll have more control over your future. After all, retirement is about freedom. Make sure your money gives you the same choice.
FAQs
What is full retirement age for 1959?
It’s 66 years and 10 months starting in 2025.
Can I claim Social Security at 62?
Yes, but with a permanent benefit reduction.
What’s the benefit of delaying Social Security?
You earn 8% more per year up to age 70.
What is MAGI in retirement planning?
MAGI affects ACA subsidies and tax strategies.
Are there benefits to part-time retirement jobs?
Yes, they offer income and sometimes health coverage.
