For years, millions of Americans grew up with the idea that retiring at 65 was the goal. That number, ingrained in the country's work culture, marked the moment to leave work behind. But time, laws, and SSA have changed the rules of the game.
Today, the full retirement age is no longer the same. Social Security has gradually raised that threshold, affecting those who are still about to take the step. Many don't know it, but retiring with 100% of the benefits now requires more patience and age.
What has changed in the full retirement age
The increase in the full retirement age was defined in the 1983 Amendments, and since then, it has been applied gradually according to the year of birth. Those born in 1959, for example, will have to wait until they're 66 years and 10 months old (66 años y 10 meses). This change takes effect in 2025 and for those born in 1960 or later, full retirement will come at exactly 67 years old (67 años exactos).
Two more months may seem like little, but it means less money if they retire earlier. Retiring at 62 years old (62 años) means a 29% monthly reduction for those born in 1959 and it will be 30% for those born in 1960 or later. This is a considerable cut if it's not planned properly.
How to face the transition if you want to retire earlier
Choosing partial retirement can be a realistic alternative; reducing the workweek to three or four days allows you to keep stable income. It also helps keep essential medical benefits. Another key strategy is to create a financial cushion: saving between 18 and 24 months (18 y 24 meses) of expenses allows you to avoid touching investments.
High-yield savings accounts or money market accounts are the most recommended. You can also monetize free space at home; renting a room can generate up to $1,000 per month. Even renting out your driveway in large cities can add extra income.
If you need a job with benefits, there are options. Companies like Costco, Home Depot, or Trader Joe's offer part-time jobs. With just 20 hours per week (20 horas semanales) you can access medical coverage.
Early retirement also requires tax intelligence; you can withdraw money from taxable accounts before your IRA or 401(k). This way, you avoid penalties and let your funds grow for later. Contributions to a Roth IRA can also be used.
They don't generate taxes or penalties if withdrawn early, which allows you to access funds without affecting your tax burden. Keeping your modified adjusted gross income low is also useful. You can qualify for Obamacare subsidies before you have Medicare, which can mean thousands of dollars saved on insurance.
If you need extra income, there are flexible alternatives. Teaching online, pet sitting, or selling crafts can generate between $30 and $50 per hour. All without committing to a full-time job.
More changes could come in the future
Although 67 years old (67 años) is the current goal, it's not final; some lawmakers propose raising it to 68 or even 69 years old (68 o incluso 69 años). Although there are no approved laws, the possibility is on the table, which is why it's key to have a flexible retirement plan. Liquid savings, bridge jobs, and a good tax strategy are essential tools.
Everything helps cushion the system's changes, as good planning allows you to take control of retirement. Not depend only on when Social Security tells you that you can retire. The key is to prepare in advance and with intelligence.