Social Security Retirement Age Adjustment Coming in 2025

The Social Security retirement age is set to change, impacting millions of Americans who rely on the program. The retirement age determines when individuals can begin receiving their full monthly benefits.

Although benefits can be claimed as early as age 62, doing so results in a reduced payment compared to waiting until the full retirement age.

Starting in 2025, the full retirement age will increase for many seniors. Michael Ryan, a finance expert and founder of MichaelRyanMoney.com, explained that this change is in response to rising life expectancies and the financial challenges facing the Social Security system.

For those born between 1943 and 1954, the full retirement age remains 66. However, individuals born after that will experience gradual increases. Here’s how it will change:

• Born in 1955: Full retirement at 66 years and 2 months
• Born in 1956: Full retirement at 66 years and 4 months
• Born in 1957: Full retirement at 66 years and 6 months
• Born in 1958: Full retirement at 66 years and 8 months
• Born in 1959: Full retirement at 66 years and 10 months
• Born in 1960 or later: Full retirement at age 67

Alex Beene, a financial literacy instructor at the University of Tennessee at Martin, clarified that seniors can still access their Social Security benefits before reaching their full retirement age, but their payments will be lower.

“This change doesn’t mean seniors can’t access their Social Security benefits before 67, but doing so will result in a reduced payout,” Beene said.

For individuals born in the last eight months of 1958, their full retirement age will arrive in 2025, while those born in the first two months of 1959 will reach it toward the end of the year.

However, Beene noted that these incremental changes are unlikely to have a dramatic effect on most recipients.

Delaying Social Security benefits beyond the full retirement age will increase the amount received each year, with the maximum increase occurring at age 70. Additionally, the 2025 cost-of-living adjustment will be 2.5%, raising the average monthly benefit from $1,927 to $1,976.

Early retirees can earn up to $23,400 annually without affecting their Social Security benefits. Once they reach full retirement age, the limit increases to $62,160. The maximum amount of earnings subject to Social Security taxes will also rise from $160,200 to $176,100.

Congress continues to debate the possibility of raising the full retirement age further, potentially to 68 or even 70, to address the program’s looming funding challenges and longer life expectancies.

Advocates of the change argue that it would improve the program’s solvency by encouraging longer workforce participation while reducing lifetime payouts.

However, critics are concerned about its impact on individuals in physically demanding jobs or those with shorter life expectancies.

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