Younger workers could shoulder the entire burden of a Congressional Budget Office option that would gradually raise Social Security’s full retirement age to 70.
The idea is gaining traction because Social Security’s retirement trust fund is projected to exhaust its reserves by late 2032, as confirmed in the 2026 trustees’ report.
If Congress fails to act before then, every beneficiary would automatically lose 22% of their monthly payment once the reserves run dry.
How the CBO’s retirement age proposal would reshape benefits
Under the budget office’s option, full retirement age would climb by two months per birth year for anyone born between 1964 and 1981.
For all workers born in 1981 or later, the threshold would settle at 70, three full years above the current level of 67, as detailed in the CBO’s analysis.
Filing for benefits at age 62 would still be possible, but the penalty would be significantly higher. The gap between 62 and full retirement age would widen from 5 to 8 years, resulting in a much steeper monthly reduction for early claimants.
Morgan Veth, vice president and financial advisor at Bogart Wealth, says those close to retiring will likely keep their current claiming strategies.
Much like the changes to Social Security claiming strategies we experienced back in 2015, where they allowed people close to retirement to continue utilizing the strategy, I don’t envision a retirement timeline overhaul necessary for those who are close to retiring
Increasing full retirement age from 67 to 69 alone would reduce average annual benefits by roughly 13%, a separate CBO letter found. Pushing the threshold to 70 could lower total program outlays by an estimated $94.7 billion from 2025 through 2034.
‘Raising the retirement age is a benefit cut, as CBO has made crystal clear,’ then-Senate Budget Chairman Sheldon Whitehouse said in September 2024, responding to a separate CBO analysis of a proposal to raise the full retirement age to 69.
Lower-income and physical labor workers face the steepest costs
Supporters argue that Americans live longer than they did when Social Security was launched in the 1930s, and that a phased increase could reduce costs without affecting checks for current beneficiaries.
That logic weakens when you examine which Americans have actually gained those extra years.
Among American men, the life expectancy gap between top and bottom earners was 12.2 years, while the gap for women was 7.8 years, research compiled by the Peter G. Peterson Foundation showed.
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Workers in physically demanding fields face an especially difficult reality.
Roughly 31.6% of workers ages 55 to 64 hold jobs requiring significant physical effort, a joint analysis by the Economic Policy Institute and The New School’s Schwartz Center for Economic Policy Analysis found.
Extending careers to age 70 is unrealistic for many of them, as the typical American worker already exits the labor force around age 62, often due to health setbacks or involuntary job loss rather than personal choice, CBS News reported.
Willie B. Thomas/Getty Images
Social Security’s accelerating trust fund crisis
The program’s financial strain is not a surprise, but it is worsening faster than policymakers had projected.
The 2026 trustees’ report moved the retirement trust fund’s depletion date to the fourth quarter of 2032, one quarter earlier than the 2025 forecast of the first quarter of 2033.
The Social Security Fairness Act expanded benefits without raising new revenue, and the subsequent One Big Beautiful Bill Act reduced income flowing into the trust funds by expanding senior deductions.
“We need to either raise scheduled revenue, reduce scheduled benefits, or some combination of the two,” Karen Glenn, the Social Security Administration’s chief actuary, said during a conference call about the report.
The program’s 75-year funding gap has more than doubled since 2000, climbing from 1.89% to 4.42% of taxable payroll, Brookings Institution researchers calculated.
The ratio of workers paying payroll taxes to each beneficiary has fallen from 5.1 in 1960 to about 2.7 today, the Peter G. Peterson Foundation reported.
For lawmakers, the appeal of raising the retirement age lies in a familiar political calculation: the people affected most are decades away from collecting.
Younger generations face an uncertain Social Security future
The proposed changes to Social Security, particularly raising the full retirement age to 70, could have significant consequences for younger workers.
While these measures aim to address the program’s impending financial challenges, they disproportionately impact those in physically demanding jobs and lower-income earners, who may struggle to extend their careers.
As the debate continues, younger Americans face growing uncertainty about the benefits they can expect in retirement.
Retirement researchers, including Boston College’s Center for Retirement Research, have noted that private savings vehicles such as 401(k) plans and IRAs will become more important as scheduled Social Security benefits face potential reductions.
The 2026 Trustees Report leaves lawmakers with a six-year window to act, and every proposed fix, from higher payroll taxes to a higher retirement age, carries trade-offs between the program’s long-term solvency and the distribution of benefit reductions across cohorts.
Related: Are Social Security benefits protected from inflation?
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