Due to increasing age and changing economic needs, new preparations will have to be made for retirement in America. Many Americans still think that the standard age of retirement is 67 years, but this picture is going to change a bit in 2025. Now the Social Security Full Retirement Age (FRA) will change once again, which will affect millions of senior citizens.
A very crucial change for all those planning for retirement or helping old parents or other family members into this. So, let’s find out about the changes in Social Security Retirement Age for 2025, its history, and how important it is for one.
What Is Full Retirement Age (FRA)?
This is the age to receive 100 per cent of your Social Security benefits. You can take Social Security even at 62 years of age; however, you lose around 30 per cent of your monthly amount under this, and it is a lifetime loss. If you wait until FRA or age 70, you will get more money every month.
How did the retirement age change?
Initially, the FRA was 65 for everyone. But in 1983, the U.S. Congress changed the law and decided to gradually increase the age. The reason for this was the increase in the average lifespan of people. People are living longer than before, and receiving a pension for a long time can be a burden on Social Security. So the rules were changed.
Now a few months are added to the FRA every year so that the Social Security system can remain sustainable.
History of the Social Security Retirement Age
What’s new in 2025?
For those born in 1959, the FRA is now 66 years and 10 months. This means they will be eligible for their full Social Security pension in November 2025. For people born in earlier years, the age was slightly lower.
Can you take Social Security at age 62?
Yes, you can start taking Social Security at age 62, but keep in mind that this results in a permanent reduction of about 30% in your monthly amount. The reduction is less if you claim just a few months early, but it can still affect your retirement budget.
Benefits of claiming late
If you delay taking Social Security after FRA (up to age 70), your pension increases by about 8% each year. This makes a big difference in your retirement income.
For example:
- If you claim at 66 years and 10 months, assume you receive $3,822/month.
- But if you claim at 62, it can decrease to about $2,710/month.
- On the other hand, if you claim at 70, your pension can increase by about 25%.
2025 Cost-of-Living Adjustment (COLA)
Every year the amount of Social Security is increased according to inflation, which is called COLA. In 2025, COLA has been fixed at 2.5%. This is the lowest increase after 2021, but it definitely gives some relief in the rising prices of daily necessities like food, gas and medicine.
Who will be affected?
This change will have the biggest impact on people born in 1959 and 1960, who will now have to wait longer for a full pension. Especially people born after 1960 will have to wait till 67 years.
Concerns about retirement savings
Today’s Gen X and younger baby boomers have a huge lack of retirement savings. According to a survey:
- 1 in 3 younger baby boomers expect to receive 90% or more of their income from Social Security in retirement.
- While Social Security is only designed to replace 40% of your working life income.
- The average Gen X has about $150,000 in retirement savings, while experts say up to $1.5 million is needed for a comfortable retirement.
- 40% of Gen Xers have no retirement savings at all.
What to do?
1. Create a Missay account – From here you can see the status of your benefits, earnings record and estimated pension amount.
2. Plan your Social Security claim – Be careful about when you want to claim.
3. Save separately for retirement – Social Security is not enough; investment in other schemes is necessary.
4. Claim at the right time – The longer you delay, the more benefits you will get.
5. Pay attention to spousal and survivor benefits – If you are married, divorced or a widow/widower, you can get additional benefits.
Conclusion
The Full Retirement Age being 66 years and 10 months in 2025 is no small change. It can have a big impact on your retirement plan, pension amount and financial security. If you claim in a hurry, you will get fewer benefits throughout your life. But if you wait a bit and move ahead in a planned manner, your financial position can be stronger in retirement. By planning wisely, claiming Social Security at the right time and focusing on your savings, you can make your retirement stress-free and comfortable.
Source: Social Security Administration, Retirement Research Institutes
FAQs
Q.1 What is the Full Retirement Age (FRA) in 2025?
A. The FRA is now 66 years and 10 months for people born in 1959.
Q.2 Can I claim Social Security at 62?
A. Yes, but your monthly amount will be reduced by 30%.
Q.3 Why is the retirement age increasing?
A. People are living longer.
Q.4 What is the COLA in 2025?
A. 2.5%, which increases the Social Security amount according to inflation.
Q.5 Is there any benefit in claiming at 70?
A. Yes, your monthly amount can increase by about 25%.