Goodbye to Retirement at 67 – the new age for collecting Social Security changes everything in the United States

The US has it long held opinion regarding the age of retirement that once one reaches 65 years he will be able to begin enjoying his benefits of the hard work that he had done in his life. However, that was true in the past and since the Social Security amendments of 1983, the Full Retirement Age (FRA) is gradually being raised. This will mean that as of the year 2025, people born in 1959 will be 66 years and 10 months old.

This transformation is not a big one, but the impact is profound. Not only does it impact what you are going to do with it, but also determines when and how much you will get with Social Security. That is why you should learn about this change and work out your strategy.

What changed in Social Security’s new full retirement age?

Under the 1983 amendments, it was planned to increase the retirement age from 65 to 67. This change is being implemented gradually with an increase of two months each.

• The FRA of people born in 1958 was 66 years 8 months.
• The FRA of people born in 1959 will now increase to 66 years 10 months.
• And for people born in 1960 or later, this limit has been fixed at 67 years.

If a person starts taking benefits early, i.e. at the age of 62, then his monthly amount will be reduced by about 29%. On the other hand, for people born in 1960 or later, this reduction can be up to 30%. On the other hand, if a person defers his or her benefits beyond FRA, each year can see an 8% increase, and by age 70, the gain can reach 32%.

Want to retire early? Fill the gap

Many people want to quit working before their traditional FRA and live a comfortable life. But it takes smart steps.

• Phased retirement: You can talk to your company about working fewer hours, such as a three- or four-day week. This will allow you to cover health insurance and living expenses without having to dip into savings.
• Building a cash runway: Experts recommend having at least 18–24 months of expenses in a savings account or money-market account. This will prevent you from having to sell investments during a recession.
• Using extra space: Renting out an empty room or driveway in your home can create extra income. A room can earn $700–$1,000 a month, and a driveway can bring in $150–$300.
• Part-time jobs: Some large companies, such as Costco, Home Depot, and Trader Joe’s, offer medical benefits to part-time workers. This option can provide both health coverage and a little income.

Taxes and smart withdrawal strategies

If you’re planning early retirement, it’s important to consider tax savings.

• Taxable Accounts Withdrawals: In general, it is preferable to withdraw out of a taxable brokerage account first, to allow accounts such as an IRA or 401(k) to continue to grow.
• Removals via a Roth IRA: You can take any amount of money out of a Roth IRA tax- and penalty-free at any time, which is safer.
• Maintaining MAGI at a low level: The Affordable Care Act offers health insurance subsidies to those who maintain MAGI at a low level.
• Side income: It is possible to earn some extra money through online tutoring, pet care or selling homemade goods. This does not need a full-time job.

Future plans and increasing retirement age

Although the process of increasing FRA from 65 to 67 is almost complete, now there is a discussion on whether it should be extended to 68 or 69.

If this happens, then millions of working people between 30 and 55 years of age are sure to be affected in the coming decades. Supporters believe that this is necessary to save Social Security, while critics say that this will have a negative impact on people doing physical labor and younger citizens.

Social Security’s Challenges and Possible Solutions

Reports suggest that the Social Security trust fund could run out by 2034. That would mean beneficiaries would receive only 81% of their payouts. To avoid this, the government has a few options—

• Raise the payroll tax.
• Extend the FRA even further.
• Or implement other financial reforms.

Conclusion: Flexibility is the key to success

Retirement planning has become more complex than ever. The FRA moving to 67 is no small change, but a sign that people will have to adapt their life strategies to the new circumstances.

If you have a cash reserve, are willing to work part-time, and make tax-efficient withdrawals, you can retire on your terms—even if Social Security’s rules say otherwise.

The key is to be flexible. Because in the coming time the retirement age may increase further. In such a situation, only preparation will guarantee you a secure future.

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