The Social Security Administration (SSA) has confirmed a new retirement age, and it’s no longer 65. This change could cost most retirees tens of thousands of dollars if they are not prepared.
With the Full Retirement Age (FRA) now increasing beyond age 65, many older Americans may experience permanent reductions in their monthly benefits if they claim benefits too early.
Why the Retirement Age Is Changing
As part of continuous improvements to increase the Social Security trust program’s solvency, the full retirement age (FRA) was recently changed. The SSA re-established the modifications in 2025 to account for increasing life expectancies and address funding issues, even though the steady increase had been going on since 1983.
Going forward, the FRA for those born in 1959 is 66 years and 10 months, and 67 for those born in 1960 or later.
This means that most people who retire at age 65 will not receive full benefits. If you claim benefits before your FRA, your monthly check will be permanently reduced by as much as 30%.
The Real Cost of Claiming Early
When it comes to Social Security, timing is crucial. Although you can start receiving benefits as early as age 62, doing so drastically lowers your lifetime benefit. However, the SSA forecasts that postponing your benefits until age 70 can result in a 24% to 32% increase.
Here’s how monthly benefits typically break down:
- Age 62: Lowest monthly benefit (up to 30% less than full amount)
- FRA (66–67): Full retirement benefit
- Age 70: Maximum monthly benefit (24%–32% more than FRA)
Therefore, if you were expecting to retire at 65, you’ll now need to decide whether to accept a smaller monthly payment or work longer to avoid financial shortfalls in your retirement years.
COLAs Won’t Fill the Gap
Although Social Security offers Cost-of-Living Adjustments (COLAs) to match the inflation rate, the modest increases cannot make up for the penalties of early retirement. This is because COLA adjustments only keep up with rising costs of housing, healthcare, and food.
Why the SSA Made This Move
Longer life expectancy and financial hardship are the reasons given by the SSA for the shift. The average life expectancy was significantly lower in 1935, when Social Security was established. The budget of the program is under a lot of strain because more seniors nowadays live for 20 to 30 years after retiring.
Although some lawmakers are still exploring raising the retirement age to 70, only 18% of older Americans approved the proposal in a recent SCL survey. Many are concerned that individuals with shorter lifespans or those in physically demanding jobs may be disproportionately impacted by the changes.
What You Should Do Now
If you’re nearing retirement or planning for the next decade, now is the time to reevaluate your strategy:
- Check your FRA using the SSA Retirement Calculator
- Review your income sources and align them with your ideal claiming age
- Delay benefits, if possible, to maximize monthly payments
- Consult a financial advisor to plan for inflation, taxes, and long-term income needs
Conclusion
The Social Security retirement age is no longer 65, and failing to adjust to this change could result in much less money during your lifetime.
Understanding your FRA and making informed decisions about when to claim is critical, whether you are in your 50s or 60s. The difference between claiming at 62 and waiting until 70 might amount to hundreds of thousands of dollars.
Plan carefully, postpone if possible, and get professional advice to make the most of every dollar you’ve earned.