Recently, the Republican Study Committee (RSC) released its fiscal year 2025 budget proposal, which includes significant cuts to Social Security. The committee’s membership comprises roughly 80 percent of all Republican lawmakers in the U.S.
House of Representatives as well as the entirety of House Republican leadership, indicating that the policies outlined in their budget proposal are major priorities for the House Republican caucus.
One policy that has continually been included in RSC budget proposals for years is an increase to Social Security’s full retirement age (FRA), the age at which seniors become eligible to access Social Security retirement benefits without a financial penalty for retiring early.
The FRA is 67 under current law, but the RSC plan would push it back to 69, leading to drastic benefit cuts for a large majority of Americans. While raising the FRA is overwhelmingly unpopular among the American people.
It has enjoyed the support of some of the most extreme far-right groups in Washington, D.C., including the Heritage Foundation, which is spearheading the authoritarian playbook known as Project 2025.
Understanding the Rise to Full Retirement Age
The changes started with the 1983 Social Security Amendments, which increased the FRA gradually from 65 to 67. Here’s how it works based on your birth year:
If you were born in 1959 and want to start Social Security in 2025, you’ll have to wait until you’re almost 67 to get full benefits. Retire earlier, and your monthly payment goes down. Delay it, and your benefit goes up.
How to Manage Before Full Retirement Age
Many people dream of retiring before their FRA. But how do you manage without full benefits? Here are some expert tips:
- Phased retirement: Instead of quitting entirely, work 3–4 days a week. Even part-time income can help.
- Build a cash buffer: Save 18–24 months of living expenses in a high-yield savings account to avoid touching investments too early.
- Rent assets: Got a spare room or parking space? These can earn $700–$1,000/month or $150–$300/month respectively.
- Part-time jobs with benefits: Retailers like Costco or Home Depot offer part-time work with health insurance—helpful if you’re not yet on Medicare.
Smart Tax Strategies for Early Retirees
If you retire early, your taxes can eat into your savings unless you plan smartly. Here’s how:
- Start with taxable accounts: Use money from regular investment accounts before touching your retirement accounts like 401(k) or IRA.
- Use Roth IRA contributions: You can withdraw your contributions anytime without tax or penalty.
- Keep your income low: Managing your income can help you qualify for health insurance subsidies under the Affordable Care Act.
- Try side hustles: Small jobs like pet sitting, online tutoring, or crafting can bring in $30–$50/hour without being too demanding.
Planning for Future Changes in Retirement Age
While the change from 65 to 67 is nearly complete, lawmakers are already debating the possibility of increasing the full retirement age to 68 or even 69 in the future.
While no new laws have passed yet, it’s a good idea to prepare for these potential changes by creating a flexible retirement plan. Having a cash reserve, part-time income, and tax-efficient withdrawal strategies will help buffer any future shifts in the Social Security system.
Retirement planning has never been more complex, and the gradual rise in the full retirement age is just one of the factors that require careful consideration.
Although the increase in retirement age to 67 may seem like a minor change, it highlights the importance of having a plan in place to navigate the shift.
Building a cash reserve, considering part-time work, and using smart tax strategies will allow you to retire when you’re ready, not when Social Security tells you to.
Keep in mind that flexibility is key, especially as lawmakers continue to debate further increases to the retirement age.
Every Seniors Must Prepare
One proposal under discussion is to raise the FRA to 69 between 2026 and 2033, which would affect millions of workers currently aged between 30 and 55. While some argue this is necessary to keep Social Security solvent, critics warn that such changes could negatively impact those in physically demanding jobs or with lower life expectancies.
For those planning for retirement, the Social Security Administration offers tools like the retirement age calculator and personalized benefit estimates through My Social Security accounts, allowing individuals to model how these changes will affect their financial future.
The increase in the Full Retirement Age in 2026 is just one of the many changes that older Americans need to consider in their retirement planning. While the tax relief provided by Trump’s bill offers some help, it doesn’t completely address the challenges facing Social Security.
As lawmakers continue to debate the future of the program, retirees must stay informed and plan carefully to navigate the evolving landscape of Social Security and retirement benefits.
FAQs:
What is the full retirement age for someone born in 1959?
If you were born in 1959, your full retirement age is 66 years and 10 months. This applies starting in 2025.
What happens if I take Social Security at 62?
Your monthly benefit will be reduced by about 29% if you file early at age 62.
Is it better to delay Social Security past FRA?
Yes. Delaying benefits beyond your full retirement age adds 8% per year, up to age 70.
Can I work part-time and still retire early?
Yes. Many people choose phased retirement or take up part-time jobs that even offer health insurance before Medicare kicks in.
Will FRA increase again in the future?
Possibly. Lawmakers are debating raising it to 68 or 69 due to funding concerns, but no final decision has been made yet.
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