3 Things to Know When You Reach Full Retirement Age in 2027

Key Points

• If you file for benefits at your full retirement age, you avoid the early-claiming reduction.

• You may receive a one-time increase if earlier earnings-test withholding reduced your checks.

• You can choose to pause benefits, which can raise future payments by as much as 24%.

After years of waiting, you are close to turning 67, the age at which you reach full retirement age. That is an important milestone whether you are already collecting Social Security or still deciding when to sign up.

Hitting full retirement age can change your benefit situation in important ways and may also give you options you did not previously have. Here are three key things to understand about what happens to Social Security at that point.

1. You no longer face the early claiming penalty

If you have not yet filed for Social Security, waiting until full retirement age means you will avoid the early-claiming reduction. You will be eligible for the full amount you have earned based on your work record so far, and your monthly payment will be higher than it would have been if you had claimed earlier. Whether that produces a larger lifetime benefit depends on how long you live.

People who are already receiving Social Security will not get a raise simply because they have reached full retirement age. Once you claim, your payment is generally locked in, with future increases coming only from cost-of-living adjustments and, in some cases, additional earnings while you are collecting.

2. You could receive a boost if the earnings test reduced your benefits

Retirees whose payments were withheld in earlier years because of the earnings test may see a one-time increase when they reach full retirement age. That adjustment would arrive in the month after your birth month, since the Social Security Administration pays benefits the following month.

The earnings test reduces benefits when you make more than a set amount from work before reaching full retirement age. If you are below full retirement age for the entire year, the reduction is $1 for every $2 earned above $23,400. If you reach full retirement age during the year, the reduction is $1 for every $3 earned above $65,160 before your birthday. Those limits rise to $25,560 and $67,920, respectively, in 2027.

How much extra you receive depends on how much was withheld previously, but for some retirees the increase can be meaningful.

3. You can choose to suspend benefits

Once you reach full retirement age, you may suspend your Social Security checks if that fits your situation. If you do, payments stop until you ask for them to resume or until you turn 70. For each month benefits are suspended, your future payment grows by two-thirds of 1%, which can increase your checks by as much as 24% over three years.

Of course, this only works if you can cover your living costs without those payments. If not, keeping your current benefit may be the better choice.