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Will there be a new retirement age in 2025 according to experts?
With Social Security on the ropes, economists are predicting radical, and unpopular, changes to the retirement age in future years.
The retirement age has been a topic of ongoing discussion and potential reform as policymakers grapple with the long-term sustainability of the Social Security system. Currently, the full retirement age (FRA) for Social Security benefits is 67 for those born in 1960 or later, with early retirement available at 62 and delayed retirement credits offered up to age 70.
However, experts and policymakers are increasingly considering the need to adjust this age to address demographic shifts and financial challenges facing the system.
As people live longer, they draw benefits for more years, putting pressure on the system’s financial stability. Additionally, the ratio of workers paying into Social Security compared to retirees receiving benefits has been declining, further exacerbating the funding challenges.
Some analysts think the retirement age is going to increase dramatically over the next decade.
“You’re not going to retire at 63 — it’s probably going to be 10 years later,” private equity fund manager and real estate investor Grant Cardone told GOBankingRates.
Others think it will be slower, but that an increase is inevitable, such as Tyler Meyer, CFP, founder of Retire to Abundance.
“It is much more likely that they will raise the full retirement age gradually to somewhere between 68 and 70,” he said.
The last significant change to the retirement age occurred in 1983, when it was gradually raised from 65 to 67 for individuals born in 1960 or later. Current proposals suggest a similar phased approach, with some plans proposing to raise the retirement age to 69 by 2033.
Is a 73 year retirement age fair?
Congress has been actively discussing proposals to increase the retirement age for Social Security benefits. The Republican Study Committee (RSC) recently released a budget proposal that calls for “modest adjustments to the retirement age for future retirees to account for increases in life expectancy.”
This plan aims to address the insolvency of the Social Security trust fund, which is projected to be depleted by 2034 if no action is taken.
It is important to note that real retirement is getting shorter and shorter. Between 2019 and 2021, total US life expectancy decreased by 2.41 years, falling from 78.85 years to 76.44 years. Should the retirement age be pushed to 73, that would mean just three years of retirement.