As life expectancy increases and pressure mounts on the U.S. Social Security system, the long-standing expectation of retiring at age 67 is being challenged. Proposals to raise the full retirement age (FRA) to 68, 69, or even 70 are gaining traction—and that shift could dramatically affect how Americans plan for their golden years.
Let’s break down what’s driving this policy change, what it means for different generations, and how to financially prepare for what’s ahead.
The Case for Raising the Retirement Age
Under current law, the FRA is:
- 66 for those born between 1943 and 1954
- Gradually increasing to 67 for those born in 1960 or later
However, Social Security’s financial foundation is under pressure. According to the 2024 Social Security Trustees Report, the program’s trust fund could be depleted by 2035, at which point payroll taxes would only cover about 80% of promised benefits.
Key reasons behind proposals to raise the FRA:
- Longer life expectancy means longer benefit payouts
- Shrinking worker-to-retiree ratio is straining contributions
- Budget shortfalls require either reduced benefits, higher taxes, or delayed eligibility
What Happens If FRA Increases to 70?
If lawmakers increase the FRA to 70, early retirees will face steeper benefit reductions than today. Here’s a simplified comparison:
| Retirement Age | Current FRA (67) | Proposed FRA (70) |
|---|---|---|
| 62 (early retirement) | ~25% benefit cut | ~30%–35% cut |
| 67 | Full benefit | ~20% cut |
| 70 (delayed) | ~124% of FRA benefit | Full benefit |
This change would not affect current retirees, but would likely apply to workers born in 1973 or later, phased in gradually over time.
What Younger Workers Should Do Now
If you’re in your 30s, 40s, or early 50s, it’s wise to start preparing for a retirement age that may shift higher. Here’s how:
Build retirement savings early:
- Max out 401(k) and IRA contributions if possible
- Consider Roth IRAs for tax-free withdrawals later
Diversify income streams:
- Invest in real estate, taxable brokerage accounts, or part-time business ventures
- Explore passive income options
Monitor Social Security policy updates:
- Changes may impact your retirement timeline, benefits, and tax planning
- Use the Social Security calculator regularly to adjust your expectations
Are There Alternatives to Raising the Retirement Age?
Yes. Other reform options have been suggested, including:
| Alternative | How It Helps |
|---|---|
| Raising the payroll tax cap | Brings in more revenue from high earners |
| Modifying benefit formulas | Reduces future obligations for wealthier retirees |
| Increasing the payroll tax rate | Adds more funding to the trust fund |
These solutions could be combined with a higher FRA to help balance the system without disproportionately impacting lower-income Americans.
FAQs
Will this affect current retirees?
No. Most proposals exclude those already retired or nearing retirement (typically those born before 1970).
Can I still retire at 62?
Yes—but expect larger benefit reductions if the FRA increases to 70.
Is it better to delay retirement past FRA?
Yes. Delaying can boost your benefit by up to 8% per year, up to age 70.
When would these changes take effect?
Not immediately. Reforms would be phased in over decades, starting with younger generations.
