The future of retirement in the United States may soon look very different, especially if a new proposal by the Republican Study Committee (RSC) moves forward. With support from nearly 80% of Republican lawmakers in the U.S. House of Representatives, including top leaders, the proposed 2025 budget plan includes some big changes to Social Security.
One major change that’s grabbing attention is the idea of raising the full retirement age (FRA) from 67 to 69. This could affect millions of Americans, especially those who are currently in their 30s to 50s.
What Is Full Retirement Age and Why Is It Changing?
The Full Retirement Age (FRA) is the age at which you can claim full Social Security benefits without any reduction. Right now, that age is 67 for people born in 1960 or later. But under the RSC’s proposal, that could move up to 69 for younger generations.
Why raise the age? Supporters say Social Security needs to be updated to remain financially stable, especially as people are living longer. A similar change happened back in 1983 when the FRA was slowly raised from 65 to 67.
However, not everyone agrees with the new plan. Critics argue it’s unfair to people in physically demanding jobs or with shorter life spans, who may not be able to work until 69 or may not live long enough to enjoy full benefits.
Who Will Be Affected the Most?
If this plan becomes law, the change will happen gradually from 2026 to 2033. Here’s who will feel the impact:
- People currently aged 30 to 55 will be the most affected.
- Those in their 20s may need to wait until 69 for full benefits.
- If you retire early at 62, your benefits will be cut even more than today.
This is especially hard for blue-collar workers and those with health issues, as working into your late 60s may not be realistic for everyone.
Retirement Age by Birth Year: What Could Change
| Birth Year | Current FRA | Proposed FRA (RSC Plan) | Impact If Retiring at 62 |
|---|---|---|---|
| 1959 | 66 years, 10 months | No Change | ~29% benefit reduction |
| 1960 or later | 67 | 69 | Up to ~35% benefit reduction |
| 1970 and after | 67 | 69 | Steeper cuts, longer wait |
Smart Ways to Prepare for a Later Retirement
Even though the law hasn’t changed yet, it’s a good idea to plan ahead. Here are some simple tips:
- Build a cash reserve: Try to save 18–24 months of expenses to handle emergencies or delays in benefits.
- Try phased retirement: Cut down working hours instead of stopping completely.
- Consider part-time jobs: Jobs at stores like Costco or Home Depot can help with income and even offer health insurance.
- Earn from assets: Rent out a room (can earn $700–$1,000/month) or a parking space (can earn $150–$300/month) for extra money.
Smart Tax Tips for Early Retirees
Retiring early doesn’t mean you should ignore tax planning. Here’s how to keep more of your money:
- Use taxable accounts first: These are flexible and don’t have early withdrawal penalties.
- Withdraw from Roth IRA contributions: You can take out your contributions any time, tax-free.
- Keep your income low: This might help you qualify for health insurance discounts.
- Do side hustles: Try pet-sitting, online tutoring, or selling handmade items. You can earn $30–$50 per hour.
How to Stay Ready for Retirement Changes
Even though the age increase isn’t official yet, it’s smart to stay prepared:
- Use Social Security tools: Try the retirement age calculator on the SSA website.
- Make flexible plans: Be ready to adjust your plans as new policies come in.
- Stay informed: Keep up with government updates, especially if you’re in your 30s to 50s.
Planning for retirement is becoming more complex, especially with possible changes like increasing the FRA to 69. While these ideas aim to protect Social Security’s future, they may also make retirement harder for many.
Start preparing now with savings, flexible planning, and smart money moves so that you stay in control of your future.
FAQs
What is the full retirement age in 2025?
If you were born in 1959, your full retirement age in 2025 is 66 years and 10 months.
Will the full retirement age increase in the US?
Possibly. Lawmakers are discussing raising it to 68 or 69, but no final decision has been made.
How much will I lose if I retire early at 62?
You could lose up to 29%–35% of your benefits depending on your birth year and when you claim.
Can I still work part-time if I retire early?
Yes, many retirees take up part-time jobs to earn extra income and stay active. Some jobs even offer benefits.
How should I prepare if retirement age goes up to 69?
Start saving more, consider part-time or phased retirement, use smart tax strategies, and check your Social Security account regularly.
I’ll be dead before I can retire is that what the government truly wants.