Raising the Retirement Age for Social Security Would Cut Benefits by Thousands of Dollars Each Year

In March, the Republican Study Committee (RSC) released its fiscal year 2025 budget proposal, which includes significant cuts to Social Security. The committee’s membership comprises roughly 80 percent of all Republican lawmakers in the U.S. House of Representatives as well as the entirety of House Republican leadership, indicating that the policies outlined in their budget proposal are major priorities for the House Republican caucus.

One policy that has continually been included in RSC budget proposals for years is an increase to Social Security’s full retirement age (FRA), the age at which seniors become eligible to access Social Security retirement benefits without a financial penalty for retiring early. The FRA is 67 under current law, but the RSC plan would push it back to 69, leading to drastic benefit cuts for a large majority of Americans. While raising the FRA is overwhelmingly unpopular among the American people, it has enjoyed the support of some of the most extreme far-right groups in Washington, D.C., including the Heritage Foundation, which is spearheading the authoritarian playbook known as Project 2025.

This is notable since Project 2025’s 900-page Mandate for Leadership fails to propose any solutions for Social Security and says, on page 710, that its proposals for the program could not be “covered here in depth.” Notably, that line was co-authored by economist Stephen Moore, who has advocated to slash and privatize Social Security, once calling it a “Ponzi scheme” and encouraging students to burn their Social Security cards. Kevin Roberts, the president of the Heritage Foundation, has also gone on record to say the Mandate for Leadership manifesto is just the basis of their plan and “there are parts of the plan that we will not share with the left.” Last month, his organization called for raising the retirement age, and the author of that analysis, Rachel Greszler, is listed as a Project 2025 contributor.

Understanding the RSC’s plan to raise the retirement age

The RSC’s FY 2025 budget proposal borrows much of its language on Social Security from its FY 2024 counterpart. Nonetheless, specific details on the plan to increase the FRA did not come from the FY 2024 budget proposal itself, but rather Roll Call’s reporting on comments made by RSC Budget and Spending Task Force Chairman Rep. Ben Cline (R-VA) on behalf of the RSC. This is important because despite dedicating six pages to a section on Social Security, the document’s policy proposals for the program were given just one paragraph, with the increase to the FRA mentioned in just one sentence on page 108: “For instance, the RSC Budget would … also make modest adjustments to the retirement age for future retirees to account for increases in life expectancy.”

Fortunately, Rep. Cline’s comments provided additional insight. He stated that the FRA would increase by three months per year, starting with those turning 62 in 2026, until it rises by two years—from 67 to 69. Then, the new FRA of 69 would be fully phased in for those turning 62 in 2033. Considering the language for this proposal has remained the same between years, it is likely that this timeline would simply be pushed back a year with the FY 2025 version. This means the phase-in would begin with those turning 62 in 2027 and finish with those turning 62 in 2034.

How a higher FRA would affect new retirees’ benefits

This higher FRA would cut Social Security benefits. According to Center for American Progress analysis, an FRA of 69 would cut benefits for all new retirees between roughly 12.5 percent and 14.3 percent by the time it is fully phased in. In addition, it would cost a median-wage retiree who earned $70,000 in 2022 and turns 62 in 2034 thousands of dollars every year. (see Table 1)

The size of the benefit reduction relative to receipt of full benefits would depend on the age at which someone claims Social Security. For example, claiming at 62 under current law imposes a maximum penalty of 30 percent on monthly benefits to make up for the fact that individual would be receiving payments for months or even years before their peers in the same birth cohort who may decide to wait before claiming benefits. Increasing the FRA to 69 would raise this maximum penalty from 30 percent to 39 percent, cutting benefits by nearly 13 percent.

This would affect all ages at which someone could claim Social Security. In the example above, the median-wage retiree turning 62 in 2034 would have their monthly benefit cut between $345 and $741, depending on the age at which they claimed benefits. After just one year, they would lose between $4,140 and $8,892.

However, the dollar amount of the cut would not be static each year. To account for inflation, Social Security benefits are updated with cost-of-living adjustments (COLAs), which the Social Security Administration expects to equal 2.4 percent each year after 2025, according to its intermediate cost projections. After accounting for these COLAs, the median-wage retiree would lose between $46,104 and $99,252 after 10 years of receiving Social Security. (see Figure 1)

For context, these losses equal about 25 to 54 percent of the median retirement account balance for those ages 55 to 64 and would create a significant gap in a typical retiree’s finances. These retirement accounts also vary widely in accessibility and account balance by income, so low- and middle-income retirees, who are likely to rely more heavily on Social Security as a source of retirement income, would be most affected by these cuts.

The RSC budget proposal does not acknowledge that increasing the FRA would cut benefits. Instead, it goes so far as to repeatedly promise that the RSC would never support benefit cuts, specifically for older workers and those already retired. For example, page 108 states: “The RSC Budget & Spending Task Force cannot be more clear: we will not now or ever support cutting or delaying retirement benefits for any senior in or near retirement.”

While those turning 62 before 2027 would indeed be shielded from the RSC plan’s benefit cuts due to the timing of the phase-in, everyone else would suffer. As shown in Table 2, nearly 3 in 4 Americans would be subject to the increase in the FRA, totaling more than 245 million people. Both the total number and the proportion of Americans affected would only increase as time goes on.

Problems with adjusting the full retirement age for life expectancy gains

In addition to generating program savings through benefit cuts, the RSC proposed raising the FRA to account for increases in life expectancy. However, overall life expectancy mostly flattened after 2010 and then decreased by 2.1 years from 2019 to 2021, marking the largest decrease in a century—from which the United States has still not recovered. Additionally, people with lower incomes or less education consistently have lower life expectancies than those with higher incomes and more education, with the gaps between these groups growing over time.

African Americans are also at a disadvantage, compared with white and Hispanic populations, due to having consistently lower life expectancies. Thus, increasing the FRA would make it less likely for these workers to be able to claim adequate retirement benefits. Considering that Black retirees are likely to earn significantly less lifetime earnings than white retirees, and often receive less benefits as a result, the cut from increasing the retirement age would make those benefits less helpful in preventing financial hardship, particularly for those who do not have another source of reliable retirement income.

A higher FRA would also not accurately reflect current retirement trends. Polling going back to the early 1990s shows that, on average, Americans retire well before the FRA and even retire before they are eligible to claim Social Security. In 2023, nearly 840,000 people claimed Social Security benefits when they first became eligible at 62 years old, making it the most popular age for new retirees to claim. In fact, more than 1.7 million retired between the ages of 62 and 65, while only about 1.4 million new retirees claimed benefits at or after the FRA.

If more than half of new retirees are claiming benefits early—oftentimes out of necessity due to ailing health, job loss, caregiving responsibilities, or physically demanding job conditions—then increasing the retirement age would only act as a punishment for not working longer, rather than a response to an overwhelming number of workers who are freely delaying retirement past the current FRA.

Conclusion

Plans to cut Social Security benefits by raising the full retirement age, such as those put forward by the Republican Study Committee and the Heritage Foundation, would make the program less adequate for future retirees and increase their risk of economic insecurity. This is especially true for low- and middle-income retirees. The data are clear: Raising the FRA would cut benefits by thousands of dollars per year for a population that has not shown significant interest in delaying retirement. This is both a poor outcome for any American hoping to retire with enough resources to make ends meet and an example of how dangerous and extreme far-right policy ideas would pull the rug out from under America’s middle and working classes.

The author would like to thank Mimla Wardak, Sachin Shiva, Alan Cohen, Will Ragland, Colin Seeberger, Lily Roberts, and Emily Gee, along with CAP’s Art, Editorial, and Legal teams, for their helpful review and feedback.