Say Goodbye to Retirement at 67 – the new age for collecting Social Security changes everything in the United States

Retirement in America once meant the age of 65. People who reached this age could enjoy the fruits of their life’s hard work while living comfortably. But times have changed. Now, the Full Retirement Age (FRA) under Social Security has been gradually increased. For those born in 1959, this new age will be 66 years and 10 months by 2025.

This change may seem like only two months, but it could have a profound impact on your retirement planning and strategy for receiving Social Security benefits. It’s crucial for every American to understand how this change will affect their financial future.

Social Security and the Raising Retirement Age

Under the 1983 Social Security Amendments, the FRA was gradually raised from 65 to 67. This process was implemented in two-month intervals.

• FRA for those born in 1959 – 66 years and 10 months (by 2025)
• FRA for those born in 1960 or later – 67 years

This means that those who were planning to retire at 66 years and 8 months will now have to wait two more months.

If a person retires before FRA, such as at age 62, their monthly pension could be reduced by approximately 29%. Meanwhile, benefits received after FRA increase by 8% each year, and if you wait until age 70, you could receive a 32% increase in benefits.

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Early Retirement and How to Fill the Gap?

Many people want to retire early, but not reaching FRA could result in reduced benefits. Here are some smart strategies.

1. Phased Retirement

Working three or four days a week can be a good option. A part-time job of just 15 hours can cover your health insurance and daily expenses.

2. Cash Runway

Maintaining financial security is important. Experts recommend having at least 18–24 months of expenses in a savings account. Keep this in a high-yield savings account or money market account to avoid having to sell investments.

3. Earn from Extra Space

If you have a spare room in your home or driveway, renting it out can generate income.

• Renting out a room can generate $700–$1,000 per month.
• Driveway parking can bring in an additional $150–$300.

4. Benefits of Part-Time Jobs

Some large companies, like Costco, Home Depot, and Trader Joe’s, offer health benefits to employees who work 20–28 hours per week. This will provide you with income and insurance.

Tax and Withdrawal Strategies for Early Retirement

If you want to retire before FRA, some tax-savvy steps can bring you relief.

• Withdraw from a Taxable Account – Let your IRA or 401(k) account grow and withdraw only when needed.
• Withdraw from a Roth IRA – Contributions can be withdrawn tax-free and penalty-free at any time.
• Maintain a low Modified Adjusted Gross Income – This will keep you eligible for Affordable Care Act subsidies.
• Side Income – Explore options like online tutoring, pet sitting, or selling handicrafts.

These ways can help you earn extra income without having to work a full-time job.

Could the retirement age increase further in the future?

Although the proposal to raise the FRA from 65 to 67 is nearly complete, discussions are still ongoing about whether to extend it to 68 or 69.

Why is this change necessary?
Financial pressure on the Social Security system is increasing. It is estimated that if the trust fund is exhausted by 2034, benefits will be limited to only 81%. Therefore, the government is considering options—such as increasing payroll taxes or raising the FRA even higher.

If this happens, it will impact millions of Americans aged 30–55 between 2026 and 2033. Those who work in physically demanding jobs or have a shorter life expectancy will be particularly affected.

How to prepare for the future?

You can prepare for these changes by preparing well in advance.

• Build a cash reserve – Strong financial security is essential for emergencies.
• Consider part-time income – this can provide both income and health insurance.
• Adopt a tax-smart withdrawal strategy – let investments grow and control your tax burden.
• Create a flexible retirement plan – prepare yourself for future changes.

Also, by logging into the Social Security Administration’s “My Social Security” online service, you can monitor your retirement planning, benefit calculations, and future changes.

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Conclusion

Starting in 2025, the Social Security FRA will increase to 66 years and 10 months. This is only a two-month change, but it matters significantly for those planning for retirement.

This change teaches us that retirement is no longer just about age, but also about smart financial decisions.It’s all about flexibility and future planning.

• Build a cash reserve.
• Consider a part-time or bridge job.
• Implement tax and investment strategies wisely.

This way, you can retire on your own terms, not just based on government regulations. Retirement in the US is no longer limited to “65 or 67 years old,” but rather, it’s a personal journey based on understanding and preparation.

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Donald