If you were born in 1960 or later, the rules just changed in a big way. Your Full Retirement Age (FRA) for Social Security is now officially 67, not 65 like your parents or grandparents. This two-year shift affects millions of Americans right now, and most people have no idea how much it will cost them. Here are the seven must-know updates that every pre-retiree needs today.
1. Full Retirement Age Is Locked at 67 (No More Gradual Increases… Yet)
- Born 1959 or earlier → FRA was 66 + a few months
- Born 1960 and later → FRA is exactly 67
That means you must wait two extra years for your 100% benefit. Claiming earlier triggers permanent cuts that never go away.
2. Claiming at 62 Now Means a Massive 30% Lifetime Cut
With the old FRA of 65, taking benefits at 62 only reduced your check by about 20–25%. Now it’s much harsher:
| Age You Start Benefits | Permanent Reduction (FRA 67) |
|---|---|
| 62 | –30% |
| 63 | –25% |
| 64 | –20% |
| 65 | –13.3% |
| 66 | –6.7% |
| 67 | 0% (full 100%) |
| 70 | +24% (delayed credits) |
That 30% cut at 62 affects every future check, plus spousal and survivor benefits. For the average worker, that’s hundreds of dollars a month gone forever.
3. Delaying to Age 70 Is Now the Biggest Pay Raise You’ll Ever Get
Every year you wait past 67 adds an 8% bonus. Waiting until 70 now gives you 24% more than your full benefit — and that higher amount is locked in for life plus annual cost-of-living increases. For many middle-income households, this single move adds more money than an entire decade of 401(k) contributions.
4. The Earnings Test Is Brutal Until You Hit 67
If you claim benefits before 67 and keep working, Social Security claws back $1 for every $2 you earn over $22,320 (2025 limit). In the year you turn 67, the limit jumps to $59,520, and they only count earnings before the month you reach FRA. Hit the limit and they can withhold entire monthly checks until it’s paid back (though you get it back later).
5. Higher Retirement Age = Higher Unemployment in Your 60s
Recent studies from the Federal Reserve and top universities show the jump from 65 to 67 pushed unemployment rates for ages 62–64 up by almost 2 percentage points. Many workers in physical jobs (construction, manufacturing, nursing, trucking) simply can’t keep going. When they’re forced out early, they face months or years of job hunting while benefits remain reduced or unavailable.
6. Medicare Still Starts at 65 — Creating an Expensive Two-Year Health Insurance Gap
Social Security moved to 67, but Medicare did not. If you stop working at 62–64, you’ll need private insurance, marketplace plans, or COBRA for two expensive years. Premiums for a 64-year-old can easily top $800–$1,200 per month per person — one of the biggest hidden costs of the new rules.
7. Another Increase to 68 or 69 Is Coming Sooner Than You Think
The 2025 Social Security Trustees Report warns the trust fund runs out of money by 2035. The fastest political fix? Raise the retirement age again. Proposals to push FRA to 68, 69, or even tie it to life expectancy are already on the table. Today’s 50-year-olds should plan as if 68 will be their new normal.
Quick Action Guide Based on Your Age Today
| Your Current Age | Birth Year Range | Your FRA | Smartest Move Right Now |
|---|---|---|---|
| 65+ | 1959 or earlier | 66–66+10m | File anytime — you’re already past the penalty zone |
| 60–64 | 1960–1965 | 67 | Build a 5–7 year cash bridge; max out delay credits |
| 50–59 | 1966–1975 | 67 | Save aggressively — another FRA hike is likely |
| Under 50 | 1976+ | 67+? | Assume 68–69 and plan accordingly |
The Bottom Line
The Social Security full retirement age hitting 67 isn’t just a minor rule tweak — it’s a complete rewrite of the retirement playbook your parents used. Waiting longer is rewarded more than ever, but being forced out early hurts more than ever. The people who win under the new rules are healthy, high-earning professionals who can easily work to 70. The people who lose are average workers in demanding jobs who get pushed out at 62–64 and face years of reduced income and expensive health coverage.
Start adjusting your plan today: save more, protect your health, consider part-time or remote work options, and run the numbers with the official SSA calculator. Because under the new rules, retiring at 65 with full benefits is officially a thing of the past.