The full-retirement age (FRA) for Americans born in 1959 will increase to 66 years and 10 months, bringing them into the modern era. The increase, which is only two months over the 1958 cohort, is due to a schedule established by the Social Security Amendments of 1983.
The adjustment may seem insignificant, but it has long-term implications: if you claim even one month early, your check will shrink forever; if you wait, your benefits will increase by 8% annually until you are 70.
This last stretch necessitates a plan for those who planned to retire at 66 years and 8 months, or at the conventional headline age of 67.
What specifically changed?
In two-month increments, the 1983 reform started to raise FRA from 65 to 67. Those born in 1960 or later will have to wait a full 67 years for an unreduced payment beginning in 2027, while the 1959 generation reaches its new milestone in 2025.
For comparison, those born in 1958 are 66 years and 8 months old when they reach full retirement. To receive an unreduced Social Security check, a person born in 1959, a year later, has to wait an additional two months, or 66 years and 10 months.
The full-retirement age settles at an even 67 years old, starting with the 1960 birth cohort and all subsequent groups. For the 1958 cohort, early filing at age 62 reduces monthly payments by about 28%; for 1959 birthdays, it reduces benefits by 29%; and for those born in 1960 or after, the age 67 regulation reduces benefits by 30%.
A two-month lapse reduces each check by roughly 1.07 percent. Benefits increase 0.67 percent every month (about 8 percent annually) after FRA, reaching a 32 percent increase if you can wait until you are 70.
Closing the gap: strategies for surviving without a full-time job and postponing Social Security
You are likely in a difficult situation if you are about to retire, or at least hope to do so if they ever permit it. You don’t see yourself working full-time until you are 67, but you also don’t want your pension to be cut. Until you reach retirement age, there are ways to relax in your final years of employment:
- Negotiate a three- or four-day workweek for a phased retirement. Even 15 hours frequently covers groceries and health insurance, saving money.
- Cash runway: Put 18 to 24 months’ worth of spending in a money-market or high-yield savings account so you can weather market downturns without having to liquidate your investments.
- Make money out of your extra space: In urban locations, driveway parking can bring in $150 to $300 per month, while a long-term room rental can bring in $700 to $1,000.
- Benefits-based bridge jobs: 20–28 hours a week of medical coverage are provided by national merchants including Costco, Home Depot, and Trader Joe’s.
Astute tax deductions and withdrawals
Allow IRAs and 401(k)s to continue compounding while tapping taxable brokerage accounts first. Contributions (not earnings) to a Roth IRA are tax- and penalty-free at any age, making them a zero-tax safety valve if you need extra money.
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Until Medicare begins at age 65, keep your Modified Adjusted Gross Income low enough to be eligible for Affordable Care Act subsidies. By using savings rather than wages to pay for their premiums, a married couple can save thousands of dollars annually.
Having a side source of money also helps. You can pay for discretionary expenses without being bound by a set schedule by selling crafts, pet sitting on the weekends, or tutoring on Zoom for $30 to $50 per hour.
The following step lands in 2025, and the ascent from 65 to 67 is nearly over. While losing two months of full benefits isn’t disastrous, it does highlight a more important reality: retirement planning requires flexibility.
Future rises are being discussed by lawmakers; some plans target ages 68 or 69.
Although no measure has been enacted, you are protected in the event that Congress takes action by flexible mechanisms like a financial buffer, part-time income, and lower fixed costs. Potential policy changes become less intimidating if such buffers are built now.
You can take a break from the 40-hour workday on your own schedule by building up a cash reserve, taking out part-time or rental income, and using tax-smart withdrawals. When the time comes, you can then get 100 percent (or more) of your earned Social Security.
