Many people envision retiring at 65, but for those born in 1959, that goal is changing. Starting in 2026, the official full retirement age (FRA) will increase to 66 years and 10 months. While this may seem like just a small two-month shift, it can significantly impact your financial planning.
If you’re approaching retirement, understanding how this adjustment affects your benefits, taxes, and savings strategy can play a key role in ensuring a comfortable retirement.
What’s Changing in the Full Retirement Age
Back in 1983, the U.S. government made changes to Social Security because people were living longer. One key change was to gradually increase the full retirement age from 65 to 67.
Here’s how the FRA looks based on your birth year:
| Year of Birth | Full Retirement Age (FRA) |
|---|---|
| 1954 or earlier | 66 years |
| 1955 | 66 years, 2 months |
| 1956 | 66 years, 4 months |
| 1957 | 66 years, 6 months |
| 1958 | 66 years, 8 months |
| 1959 | 66 years, 10 months |
| 1960 or later | 67 years |
So, if you were born in 1959, you’ll reach full retirement age two months later than someone born in 1958. Retiring early — say at age 62 — will reduce your monthly Social Security payments by about 29%. On the other hand, if you delay claiming until age 70, your payments could increase by up to 32%.
How to Retire Before Full Retirement Age
Not everyone wants to wait till their FRA. Some want to retire earlier due to health, stress, or personal reasons. Here are a few ways to make that happen without running out of money:
- Phased retirement: Try working part-time or fewer days a week to slowly ease into retirement.
- Build a cash buffer: Save at least 18 to 24 months of expenses in a savings account or liquid fund.
- Monetise your space: Rent out a spare room or even your driveway to earn extra income.
- Find a part-time job with perks: Companies like Costco or Home Depot offer medical benefits even for part-time workers.
These options help bridge the gap between early retirement and your FRA, keeping your savings safe and giving you more financial freedom.
Smart Tax Moves for Early Retirees
If you retire before FRA, managing your money wisely is very important. Here’s how you can do it:
- Use taxable accounts first: Withdraw from regular investment accounts before dipping into your 401(k) or IRA to avoid early withdrawal penalties.
- Use Roth IRA contributions: You can take out your contributions (not the earnings) anytime, tax-free.
- Keep your income low: If you need health insurance before 65, keeping your income low can help you qualify for government subsidies under the Affordable Care Act.
- Try a side hustle: Part-time tutoring, freelancing, or selling products online can help you earn $30 to $50 per hour, without the stress of full-time work.
Could Retirement Age Increase Again?
The full retirement age will officially be 67 starting in 2026 for people born in 1960 or later. But there are talks of raising it even further — possibly to 68 or 69 — due to pressure on Social Security funds.
To stay ahead, you should:
- Keep an emergency fund
- Develop multiple sources of income (rent, freelance work, dividends)
- Plan for tax-efficient withdrawals
Being flexible and prepared is key if rules change again in the future.
Retirement Today: It’s More Than Just an Age
Gone are the days when everyone retired at 65. With changing rules and rising costs, retirement is more about preparation than reaching a specific age. For those born in 1959, the shift to 66 years and 10 months for full retirement is a reminder that you need a smart, flexible plan.
Whether you plan to retire early or wait for higher Social Security payouts, make sure you’re saving enough, exploring income options, and staying updated with rule changes. Retirement today is not just about stopping work — it’s about living well, with freedom and peace of mind, on your own terms.
One proposal under discussion is to raise the FRA
Social Security faces significant financial challenges, with projections suggesting the program’s trust funds could be depleted by 2034. If this happens, retirees could see their benefits reduced to just 81% of what they were promised. Lawmakers are considering potential solutions, such as raising payroll taxes or further increasing the FRA.
One proposal under discussion is to raise the FRA to 69 between 2026 and 2033, which would affect millions of workers currently aged between 30 and 55. While some argue this is necessary to keep Social Security solvent, critics warn that such changes could negatively impact those in physically demanding jobs or with lower life expectancies.
For those planning for retirement, the Social Security Administration offers tools like the retirement age calculator and personalized benefit estimates through My Social Security accounts, allowing individuals to model how these changes will affect their financial future.
The increase in the Full Retirement Age in 2026 is just one of the many changes that older Americans need to consider in their retirement planning. While the tax relief provided by Trump’s bill offers some help, it doesn’t completely address the challenges facing Social Security.
As lawmakers continue to debate the future of the program, retirees must stay informed and plan carefully to navigate the evolving landscape of Social Security and retirement benefits.
FAQs
1. What is the new full retirement age for those born in 1959?
Starting in 2026, people born in 1959 will reach full retirement age at 66 years and 10 months.
2. Can I retire at 62 even if my FRA is 66 years, 10 months?
Yes, you can, but your monthly Social Security benefits will be reduced by nearly 29% permanently.
3. Is it better to delay taking Social Security beyond FRA?
Yes. For every year you delay past your FRA (up to age 70), your benefit increases by around 8%, up to 32% more.
4. How can I manage health insurance before turning 65?
You can work part-time with employer benefits or keep your income low to qualify for ACA health insurance subsidies.
5. Will retirement age rise again in the future?
It might. Discussions are ongoing to raise the age further, possibly to 68 or 69, but no final decisions have been made yet.
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