Worried that the age of retirement will change? Put your mind to rest: It already has—the traditional retirement age of 65 is history for most of us. That change was initiated during the first Social Security benefits crisis—in the early 1980s when Ronald Reagan was President.

At this point, only people born in 1937 or before can begin receiving full Social Security benefits when they turn 65. For the rest of us, the age of eligibility has crept upward. Those people, born in 1960 or later, aren’t eligible for full benefits until they turn 67. For most of the Boomers, it’s age 66.

Key Takeaways

  • Full Social Security benefits is only available at age 65 for those who were born in 1937 or earlier.
  • For the rest of the population, the age of eligibility has increased with the Baby Boomers, not eligible for full benefits until age 66.
  • For those who were born in 1960 or later, eligibility for full benefits kicks in at age 67.
  • The Social Security Trust Fund will be exhausted by 2035 unless the retirement age is increased, taxes are hiked, or benefits cut.

Retirement Aging Trends

But is this upward aging a one-time adjustment, or the foreshadowing of a trend? Are we looking at a retirement age of 70 in the near future? The bulge in the population chart known as the baby boomers moving into retirement, combined with a smaller cohort of younger workers, has pushed Social Security into deficit spending.

The good news, however, is that the agency set aside nearly $2.9 trillion (as of 2020) in the so-called Trust Fund for this foreseeable event. But those extra dollars will be completely disbursed by 2034—or sooner—as longevity means more retirees claim benefits for a longer time.

Even the Social Security Administration (SSA) acknowledged this reality in its 2014 Trustees Report, stating bluntly, “Neither Medicare nor Social Security can sustain projected long-term program costs in full under currently scheduled financing.” 

Avoiding the Worst-Case Scenario

There are several ways to save Social Security from insolvency, ranging from increasing payroll taxes to curtailing benefits through a reduction in cost-of-living increases or cutting benefits for high-income recipients.

Obviously, these different options are going to vary in disfavor depending on the constituencies: Wage-earners are going to be less enthusiastic about higher payroll taxes. At the same time, retirees will fight against limiting benefits. Or, in a worst-case scenario, if the government takes no action at all, payments would actually drop by 21% to 27% of what they are currently to match lower incoming revenue.

One of the easiest and least painful options—at least for those who are currently 45 and over—is continuing to push the age of eligibility upward for future generations, since it would affect only the youngest members of the population who are the farthest away from collecting while grandfathering in those who are currently in or near retirement.

Senator Rand Paul (R-Kentucky) has repeatedly suggested in public comments that as part of his larger Social Security reform plan, he would start eligibility changes with those who are currently 55. Still, it’s unlikely that such an unpopular notion would gain enough support to pass Congress. 

The Bottom Line

If no changes are made to Social Security, it will exhaust the Trust Fund money in about 15 years, and benefits for everyone will be cut. The worst burden will fall on the youngest Americans, who may eventually face a shortfall so severe that the entitlement program would effectively cease to exist.

In lieu of that, the federal government needs to act to increase worker contributions and reduce benefits payouts. One of the most likely tactics to accomplish that goal is to continue to push upward the age at which benefits can be claimed, from the current high of 67 to age 70, as the U.K. has proposed for its youngest citizens.