Retirement Age Rises in 2025: Big Changes for Those Born in 1958 and 1959 – Are You Affected?

Most Americans believe 65 is the usual retirement age, but Social Security’s so-called “full retirement age” is already older than that, and it’s expected to rise even higher in 2025.

The full retirement age (FRA) of Social Security refers to the age at which workers can begin collecting their full benefits, which is determined by the number of years they have worked and their earnings. The longer someone works and the higher their salary, the more Social Security benefits they can collect when they finally file for them. The FRA used to be 65, but Congress revamped the program in 1983, raising the retirement age to account for increasing life expectancies. 

As part of the overhaul, the FRA has gradually increased by two months, depending on a person’s birth year. For example, persons born in 1957 completed their FRA when they turned 66 and 6 months old, which began in 2023; however, people born in 1958 must reach 66 years and 8 months old to qualify for full benefits, which started in September 2024. The full retirement age for persons born in 1959 will rise by two months to 66 years and ten months. That means the increased FRA for that cohort will take effect in 2025, with those born in 1959 eligible for full benefits in November 2025.

For example, claiming at age 62 will result in a benefit that is approximately 30% less than your full benefit — a sacrifice that many older Americans are willing to make, given that many are forced into retirement earlier than expected or because they believe it makes more sense to claim more years of guaranteed retirement income, even if it is at a lower amount. While the retirement age hike is not new, it may surprise some older workers because claiming even a month before your FRA can reduce your benefits, albeit at a lower percentage than 62.

The increase in the FRA for those born in 1959 represents the penultimate age change, with the last jump coming for workers born in or after 1960. Those Americans will not be allowed to claim their FRA until they are 67, meaning someone born in January 1960 will have to wait until January 2027 to receive their full retirement benefits. This will primarily affect the youngest baby boomers and Gen Xers, with the latter generation encompassing 1965-1980. However, a new study indicates that these workers are among the least prepared for retirement. The youngest boomers, born between 1959 and 1965, turned 65 this year, but many do not have enough assets to support themselves in retirement.

Meanwhile, Generation X is on track to retire without enough savings for their golden years. Generation X households have an average retirement savings of approximately $150,000, significantly less than the nearly $1.5 million Americans estimate they need to retire comfortably. Another survey discovered that almost 40% of Gen Xers have not saved anything for retirement. Meanwhile, older Americans can maximize their Social Security payments by waiting to claim until they reach the age of 70. At that point, one’s benefits are increased by around 25% over full benefits. However, according to a recent Transamerica Center for Retirement Studies survey, just around 4% of Americans wait until they are 70 to claim the maximum Social Security payout.