Seniors Planning to Claim Social Security at 66 in 2027 Face a Huge Shock
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One nice thing about Social Security is that you get to choose when to sign up.
You can file for Social Security benefits as early as age 62. But if you want your monthly checks without a reduction, you’ll need to wait until your full retirement age (FRA) is reached. You can also boost your Social Security checks by delaying your claim past FRA.
But FRA is not a single number. It depends on the year you were born. And if you’re turning 66 in 2027 and are planning to claim Social Security at that point, you may be in for an unwanted financial surprise.
Filing for Social Security early has consequences
For some people, filing for Social Security at 66 meant getting to collect their monthly benefits in full. But if you were born in 1960 or later, your Social Security FRA is not 66. Rather, it’s 67. This means that if you claim Social Security at 66, you could be looking at reduced monthly checks for life.
Now, the good news is that filing for Social Security one year early doesn’t result in such a massive hit to your benefits. In that case, your checks will shrink by about 6.67%. If you’re eligible for a monthly benefit of $2,000, you’ll get $1,867 per month instead.
But over the course of a year, the difference could add up. Losing $133 per month in Social Security means ending up with almost $1,600 less each year.
You may be able to absorb that hit in terms of your day-to-day expenses. But for things like unplanned home or car repairs, an extra $1,600 could make a huge difference.
Also remember that claiming Social Security before your FRA has consequences beyond just shrinking your monthly checks. If you’re the higher earner in your household, your spouse will generally be eligible for survivor benefits from Social Security if they outlive you. Those benefits will equal 100% of your monthly checks.
If you reduce your Social Security benefits even slightly by filing one year early, you’ll leave your spouse with less monthly income for the rest of their life. That could become a problem if your savings have run out by then.
Also, the smaller your Social Security checks are to begin with, the less valuable the program’s yearly cost-of-living adjustments are. So, in addition to smaller benefits, you’ll be looking at smaller raises in dollar terms.
Make sure you know your Social Security FRA before filing
Some people may end up claiming Social Security at 66 in 2027 simply because they don’t realize what their FRA is. So before you sign up for benefits, make sure you understand when you’re eligible for them without a reduction.
It’s one thing to deliberately claim Social Security a year early when there’s a reason for it. It’s another thing to accidentally claim Social Security a year early and wind up with reduced checks for life. You don’t want to end up in the latter situation, and there’s an easy way to avoid it.
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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.
