Turn 66 in 2027 and Your Full Retirement Age Is 67. Claiming a Year Early Costs 6.7% of Every Check for Life
Turning 66 feels like the finish line for Social Security, but that assumption could quietly shrink your checks for the rest of your life. Worse, the damage reaches your annual raises and your spouse's future income too.
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There’s a reason the decision to start collecting Social Security is such an important one. The monthly benefit you’re eligible for in retirement depends on your earnings history and the age you choose to start receiving benefits.
You can sign up to start getting Social Security as early as age 62. But if you want your monthly benefits without a reduction, you’ll need to wait until full retirement age, or FRA.
If you’re turning 66 in 2027, you might assume that you’re able to collect your Social Security checks in full. But that’s not correct. And if you file too soon, you could end up slashing your benefits for life.
Full retirement age has changed
Social Security’s FRA used to be 66. But for people who were born in 1960 or any year after, it’s 67.
This means if you’re turning 66 in 2027 and claim Social Security then, you’ll be filing a year early. As such, you can expect your benefits to be reduced by about 6.7% — for life.
Now the reduction for claiming Social Security one year early isn’t nearly as bad as the reduction for signing up for benefits at 62. If you claim Social Security five years ahead of FRA, you’ll be looking at a reduction of about 30% on a permanent basis. A 6.7% reduction may not sting nearly as much.
However, if you expect Social Security to constitute the majority of your retirement income, or if you don’t have any income to fall back on outside of Social Security, claiming benefits even one year early could hurt you throughout retirement. Plus, claiming early has less obvious but very real consequences.
Each year, Social Security is eligible for a cost-of-living adjustment, or COLA, to help benefits keep pace with inflation. But if you reduce your benefits by filing early, your COLAs will be smaller on a dollar basis.
Furthermore, if you’re the higher earner in your household and you pass away before your spouse does, they’ll typically be eligible for survivor benefits from Social Security that equal 100% of the monthly checks you were able to collect while you were alive. If you file for Social Security one year earlier and reduce those benefits, you’ll leave your spouse with less money for the rest of their life, too.
Make sure you know your FRA
It’s one thing to make a conscious decision to claim Social Security a year early because you need the money or want the money to fulfill a certain goal. But it’s another thing to claim Social Security a year early and lose 6.7% of your benefits for life because you didn’t realize you were signing up too soon.
That’s why it’s crucial to know your FRA before you file for Social Security. As of now, FRA is 67 for anyone born in or after 1960, so it’s a pretty easy number to remember. But Congress could vote to change FRA in the future, especially since Social Security is facing a funding shortfall, and that’s one possible solution to help address it.
As such, make sure to pay attention to potential FRA changes. They may not happen right away, but if you stay informed, you’ll be less likely to file for Social Security at the wrong time.
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Maurie Backman has more than a decade of experience writing about financial topics, including retirement, investing, Social Security, and real estate. Her work has appeared on sites that include The Motley Fool, USA Today, U.S. News & World Report, The Washington Post, and Kiplinger.
Prior to becoming a full-time financial writer, Maurie worked in the financial industry trading distressed debt. She then changed course and spent a few years designing electronic toys. After a stint in content marketing and UX, she shifted back into writing and has since covered everything from the housing market to estate planning to Medicare.
When she's not busy writing, Maurie can be found hiking, walking her dogs, driving her kids to their various sports practices and games, and curling up with a good book. She cooks on occasion and bakes way too often.
