There’s been plenty of news about the Social Security Administration lately.
What hasn’t been center stage, however, is the ongoing debate over raising the Social Security full retirement age to help keep the system financially stable. Would a higher benefit-claiming age hurt or help seniors?
On one hand, longer life expectancies and extended careers may support the case for working later.
On the other hand, many older Americans face health challenges, age discrimination or physically demanding jobs that make delayed retirement unrealistic.
Here’s what today’s and tomorrow’s retirees need to know about the potential consequences of a higher retirement age.
[READ: What Is the Maximum Possible Social Security Benefit in 2025?]
Will It Be Necessary to Raise the Retirement Age?
In its 2023 report, the Social Security Board of Trustees said the Social Security trust fund might fall short in 2034 unless Congress makes changes.
By then, the fund’s annual tax revenue would cover only 80% of benefits.
“Social Security wasn’t designed for today’s lifespans or retirement timelines,” said Jordan Gilberti, founder and certified financial planner at Sage Wealth Group in New York, in an email.
“Something has to give, and while raising the retirement age isn’t ideal, it’s one of the more predictable ways to extend the program’s lifespan,” he added.
That wouldn’t be popular, but it’s necessary, said Crystal Stranger, CEO of Optic Tax in Boulder, Colorado, in an email. “Not just in the U.S., but around the world, Social Security systems are failing and the retirement age is increasing by broad strokes,” she said.
For example, France, China and Sweden have increased their statutory retirement age or plan to. “It seems only natural that the U.S. will follow suit to spread out the pain caused by an aging populace who is outliving their predicted longevity,” Stranger said.
Pros and Cons of a Higher Retirement Age
Congress hasn’t raised the full retirement age since 1983, when it was increased to age 67 for those born in 1960 or later, up from age 66.
“At first glance, raising the full retirement age, alongside increasing the taxable wage base, seems like a rational fix for Social Security’s long-term funding challenge,” said Nick Davis, founder of Brindle & Bay Wealth Management in Frisco, Texas, in an email.
He added that the 2010 Bowles-Simpson Commission proposed exactly that, and the Social Security Administration’s then-chief actuary, Stephen Goss, affirmed that this two-pronged approach could extend the program’s solvency for 75 years.
Davis said he’s encouraged to know that a mathematically viable solution exists.
“But the policy debate gets more complicated when we consider the personal impact,” he added.
Delaying full retirement age may work on paper, he said, but for workers in physically demanding jobs or lower-income brackets, waiting an extra year or more to access full benefits may present a big challenge.
“Healthier, wealthier Americans may adapt, but others may be disproportionately affected,” Davis said.
However, a higher retirement age may offer long-term benefits, particularly for those able to remain in the workforce.
“Since we are living longer, it makes sense that we should work longer,” said Rob Duncan, owner of Global Impact Wealth Management in Riverside, California, in an email.
While Duncan noted the downsides for those whose health prevents them from staying in the workforce longer, he also identified possible advantages.
“Working longer will keep us mentally, physically and socially active longer. This will allow the program an opportunity to become sustainable,” Duncan said.
[READ: How Much You Will Get From Social Security.]
What Delaying Benefits Might Mean for You
The potential upside for pre-retirees is a more sustainable system and possibly higher monthly benefits for those who delay claiming at age 62, when Americans are entitled to a reduced benefit.
“But that silver lining is often hard to appreciate when you’re staring down a longer wait, especially if your body or your finances are already tired,” Davis said.
If Congress eventually increases the full retirement age, it likely will not take effect immediately. When it was raised in 1983, the oldest people affected were those born in 1960, so they had plenty of notice.
“Most changes made are well into the future, giving pre-retirees a chance to plan and prepare,” Duncan said. “Unfortunately, many people remain in the dark and do not plan to begin with.”
A Higher Retirement Age as Part of Broader Reform
It may seem hard to imagine any positive aspects of raising the retirement age, beyond giving the trust fund the wherewithal to pay all benefits fully.
However, if an age increase to claim benefits is part of a larger, structural reform, it could strengthen the system and bolster public confidence.
“A more stable Social Security system could give people in their 40s and 50s more confidence that benefits will still be there when they retire,” Gilberti said.
“And delaying benefits, when it’s a choice, can actually lead to significantly higher monthly income later in life,” he added. “But the key word is choice. It’s only an upside for those who are healthy enough and financially secure enough to delay claiming.”
Many retirees would rather wait a bit longer to claim Social Security if it means the program stays funded and continues paying benefits, said George Pikounis, financial advisor at Burns Estate Planning in Tallahassee, Florida.
“If you are concerned about Social Security running out and not being available for your generation, increasing the retirement age would also increase the probability that it will be around for you when you do retire,” Pikounis said in an email.
“If the option were to take Social Security earlier and potentially outlive your benefits, most of us would choose the alternative to make it more likely the program continued to pay us benefits into our 80s and 90s,” he added.
[Read: Trump Proposed Eliminating Social Security Taxes. Here’s the Bill That Could Make It Happen]
Why Are Politicians Slow to Act?
Despite the narrow timeline to fix Social Security, there are many reasons why politicians may appear hesitant to tackle the problem.
“The average age of a U.S. senator is 64 years, while members of Congress are only slightly younger at just under 58 years old,” Pikounis said. “They probably won’t be as impacted by the results of inaction as their younger constituents.”
“Social Security is considered one of the third rails of American politics,” he added. “The overwhelming majority of Americans view Social Security as a positive and are against cutting benefits, including raising the retirement age. However, most people don’t like paying more taxes either. This means that no matter what a politician does to address this issue, they risk making voters angry.”
More from U.S. News
How to Apply for Social Security
How to Retire During a Recession
Are Your Social Security Benefits Secure?
How Raising the Retirement Age Could Help or Hurt Seniors originally appeared on usnews.com
Update 04/15/25: This story was published at an earlier date and has been updated with new information.
