Forget Retirement at 67! Millions Can Now Retire at 66 Years and 10 Months

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Retirement: One of the biggest joys of life is the day of retirement, when you leave behind the burden of your work and start enjoying your dreams and relaxing moments. But imagine, how would you feel if there is a sudden change in the retirement age? Similar changes are going to happen in America from 2025, which can shake the plans of millions of people.

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What is the new change

The full retirement age (FRA) for people born in 1959 in America will now be 66 years and 10 months. This is only 2 months more than those born in 1958, but it will affect the pension benefits of the whole life. This change is part of the Social Security reforms made in 1983, under which the retirement age is gradually being increased from 65 to 67 years.

Why is this change important

A delay of 2 months may sound trivial, but if a person starts taking pension even before his FRA, then his monthly amount decreases forever. On the other hand, the later you start taking pension after FRA, the more the amount will increase every month, by about 8% annually, and if you wait till the age of 70, then the total increase can be up to 32%.

Effects of taking pension early or late

If a person born in 1959 takes pension at the age of 62, then his monthly amount will be reduced by about 29%. Whereas at FRA he will get 100% benefit, and waiting till 70 years can give 32% more pension.

What can happen next

Proposals to increase FRA to 68 or 69 years are also being discussed in Congress. No law has been passed yet, but it is clear that in the coming years, it will be very important to have flexibility in retirement planning.

Those who start improving their financial habits, building cash reserves, and creating part-time income sources now will not have to fear these changes.[Related-Posts]

Disclaimer: The information provided in this article is for general awareness and education purposes only. Consult your financial advisor before making any financial decisions.