New bill would allow some workers to claim Social Security benefits 2 years earlier. Are you one of them?
Moneywise and Yahoo Finance LLC may earn commission or revenue through links in the content below.
When Social Security was first created, Americans didn’t become eligible for any benefits until age 65. But reforms in 1956 opened up the door for women to collect a reduced benefit starting at age 62, and men were offered this same option starting in 1961 (1).
For 65 years, this milestone age restriction has remained unchanged, even as the full retirement age (FRA) gradually moved up from 65 to 67 (2).
Top Picks
But that could be coming to an end. On Sept. 24, Michigan Congresswoman Haley Stevens introduced new legislation that would allow some older Americans to claim their full Social Security benefits two years earlier.
According to a press release (3) announcing the proposed legislation, the Blue Collar Social Security Fairness Act would lower the age when workers become eligible for full benefits to 60 — but only for “Americans who work with their hands.”
Stevens explained that “far too often, those who work in manual labor cannot continue working.” When that happens, they face a difficult choice: Their bodies make their job impossible, but eligibility for an unreduced Social Security benefit is years away.
Construction workers, roofers, nurses and manufacturing workers would be among the beneficiaries, but that’s not a comprehensive list.
The bill (4) directs the Social Security Administration to identify physically demanding occupations that create an entitlement for an early claim. A weighted point system would also allow those who spent only part of their career in these jobs to potentially claim early.
It’s not yet clear whether lawmakers will support this proposal, but its potential impact is obvious.
Currently, a worker who claims Social Security at the earliest possible age of 62 sees their standard benefit reduced by 30%, compared with their standard benefit at an FRA of 67. However, if that same worker could start full benefits at 60, they’d get two extra years of payments and avoid the early filing reduction.
Those added benefits could make a big difference: If a worker was on track for a $2,000 monthly benefit at 67, for instance, collecting the full unreduced $2,000 starting at 60 would provide an extra $168,000, compared to waiting until 67.
Of course, this could weaken Social Security’s already-precarious finances. The program’s trust fund is currently forecasted to run dry as early as 2032 (5), necessitating an automatic 22% cut to all benefits if lawmakers don’t act.
Allowing some workers to claim full benefits earlier could accelerate that timeline.
While solutions exist to offset this problem, including raising revenue through a payroll tax hike (6), it remains to be seen if there will be enough support for the bill to pass into law.
The good news is that workers still have options to try to set themselves up for early retirement, even if those Social Security checks don’t start coming in at age 60.
Invest for your own early retirement
You can’t control Social Security rules, but you do control how much you invest.
For instance, putting money into ETFs could allow you to benefit from compound growth, making wealth building easier. What’s more, rather than relying on the performance of one stock or bond, they offer instant diversification since investors are exposed to hundreds, or possibly thousands, of securities in a single asset.
The beauty of ETF investing is also its accessibility — anyone, regardless of wealth, can take advantage of it. Even small amounts can grow over time with tools like Acorns, an app that automatically invests your spare change.
All it takes is a few minutes to sign up and link your cards with Acorns. Once your account is running, Acorns rounds up your purchases to the nearest dollar, investing the difference — your spare change — in a diversified portfolio of ETFs managed by experts at leading investment firms like Vanguard and BlackRock.
With Acorns, you can start investing with as little as $5, and they will even add a $20 bonus to help you get off on the right foot.
Have a cash cushion
While investing is a great way to grow your retirement portfolio, it’s always a good idea to have safe, liquid assets to live on during a market downturn. That way, you don’t have to sell at a loss because you’re relying on investments for income.
A high-yield account like a Wealthfront Cash Account can be a great place to grow your uninvested cash, offering both competitive interest rates and easy access to your money when you need it.
A Wealthfront Cash Account currently offers a base rate APY of 3.55% through program banks. With a new client boost and direct deposit incentive, referred clients can earn up to a 4.55% APY.
That’s 10 times the national deposit savings rate, according to the FDIC’s August report.
With no minimum balances or account fees, as well as 24/7 withdrawals and free domestic wire transfers, your funds remain accessible at all times. Plus, you get access to up to $8M FDIC Insurance eligibility through program banks.
Consider gold as an inflation hedge
If you’re worried about inflation eating away at your budget over a long retirement, precious metals like gold have long been seen as both a hedge against inflation and a recession-resistent investment.
That’s because the precious yellow metal can’t be created out of thin air or printed at will by central banks like fiat currencies are. This inherently limited supply can help it store value in the face of inflation.
Gold is also considered the ultimate safe haven. Since it’s not tied to any one country, currency or economy, investors often flock to it — driving prices higher — in times of economic uncertainty or geopolitical instability.
One way to invest in gold that also provides significant tax advantages is to open a gold IRA with the help of American Hartford Gold.
Gold IRAs allow investors to hold physical gold or gold-related assets within a retirement account — combining the tax advantages of an IRA with the protective benefits of investing in gold, making it an option for those looking to potentially hedge their retirement funds against economic uncertainties.
Even better, you can often roll over existing 401(k) or IRA accounts into a gold IRA without tax-related penalties. To learn more, get your free 2025 information guide on investing in precious metals.
Qualifying purchases can also receive up to $25,000 in free silver.
Get help from a professional
Preparing for a potential early retirement requires a lot of planning, but working with a financial advisor can help make it happen.
Research from Envestnet (7) suggests that financial advisors can help clients achieve around 3% greater returns by providing services such as financial planning, asset selection and allocation, investment selection, systematic rebalancing and tax management. For someone starting with a $50,000 portfolio, that means getting professional help could lead to over $1.3 million in additional growth over three decades, depending on investment strategy and market conditions.
Advisor.com (8) has built a platform that makes it easy to get the help you need from a fiduciary financial professional — for free. An advisor can work with you on determining your investing timeline, risk tolerance and asset mix so you can build the portfolio that’s right for you.
Just enter a few details about your finances and goals, and Advisor.com (8)’s AI-powered matching tool will connect you with a qualified expert best suited for your needs based on your unique financial goals and preferences.
You can even schedule a free, no-obligation consultation, to see if your match is a good fit for you. That way, you can feel more secure about building your future, no matter what changes are made to Social Security.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Social Security Administration (1), (2), (5); Stevens House (3), (4); Cato Institute (6); Envestnet (7); Advisor (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.