Raising Social Security retirement age could impact financial plans, leading to potential benefit reductions.

From Yahoo Finance: 2025-06-28 07:04:00

The Social Security program faces a financing shortfall, potentially leading to benefit reductions in under a decade. Lawmakers are considering raising the full retirement age, impacting retirement planning. Raising the age could force many to work longer, especially those in demanding jobs. People may have to rely more on personal savings, posing challenges for those unable to work or unemployed.

Raising the Social Security retirement age may lead to early withdrawal of retirement funds, resulting in tax penalties. Individuals need to review and adjust retirement plans accordingly. Older individuals may need to save more to make up for the delayed start age. Financial advisors and tools can aid in planning for retirement changes.

Younger individuals can mitigate the impact of a higher retirement age by saving more early on. A 35-year-old planning to retire at 65 may need to save an extra $1,100 annually, while a 55-year-old may need to save an extra $5,000 yearly. Planning ahead is crucial to secure a stable financial future.

Read more: 5 Ways Increasing Social Security Retirement Age Could Disrupt Financial Plans