Retirement, that day that every worker has marked on their calendar, a stage in which we hope to rest and enjoy what we have earned over the years… Now, Social Security has changed the rules.
Starting next January 1, 2025, new adjustments to the full retirement age (FRA) will come into force. If you were born in 1959, these changes directly affect you. Stay to read, we will tell you.
Changes in the retirement age.
That’s right, currently retirement is at 66 years and 8 months, this has been the case until 2024 for people born in 1958, however, 2025 does not bring the best news for those born in 1959 and that is because they will have to work two more months to receive their full benefits, thus stipulating the retirement age at 66 years and 10 months.
With this, what Social Security intends is to reach retirement age at 67 years!
What happens if I want to retire early?
Although the minimum age to apply for retirement benefits remains at 62, doing so before Full Retirement Age (FRA) will result in the administration keeping a large amount of your monthly payments, meaning that retiring early means earning less money than you should.
How reductions are calculated (an example)
Suppose a person born in 1960 decides to retire at age 62. Since his or her FRA is 67, he or she would be retiring 60 months early. In this case:
For the first 36 months, the benefit is reduced by 0.55% per month (20% total).
For the remaining 24 months, the reduction would be 0.42% per month (an additional 10%).
This translates into a total reduction of 30% in profits!!
| Months Early | Monthly Reduction | Total Reduction |
| First 36 months | 0.55% | 20% |
| Additional 24 months | 0.42% | 10% |
| Total | – | 30% |
So, to claim 100% of their pay, those born in 1959 will have to turn 66 years and 8 months, and those born in 1960 will have to wait until they are 67.
Why is the retirement age being adjusted?
With increasing longevity, the SSA aims to balance the distribution of benefits so that there are no major imbalances in the pension system, and, on the other hand, these updates are trying to adapt to the new economic realities of the country.
Considerations to keep in mind
Four months before your retirement date, Social Security already allows you to apply for benefits, so if you are already at the starting point of retirement life, it is advisable to plan what this period of your life will be like. The Social Security Administration offers tools on its website that will help you estimate your benefits based on your earnings history and retirement age.
Are there more income options besides a retirement plan?
In addition to Social Security benefits, consider exploring other sources of retirement income, such as:
- Private retirement accounts (IRAs or 401(k)s).
- Employer-sponsored plans.
- Long-term investments.
- Applying for COLA
So, even though retirement may seem like the horizon, never coming, it is better to be prepared for when that day comes so that we are not caught without any information.