If You Turn 66 in 2027 and Your Full Retirement Age Is 67, Filing Early Cuts Every Check by 6.7% for Life

Reaching age 66 may seem like a milestone for Social Security, but filing then could quietly lower your monthly payments for the rest of your life. The impact can also carry over to future cost-of-living increases and, in some cases, your spouse’s income.

There’s a good reason the choice of when to start Social Security matters so much. Your retirement benefit is based on your earnings record and the age at which you begin collecting.

You can begin receiving Social Security as early as age 62. However, to get your full monthly benefit without a reduction, you need to wait until your full retirement age, or FRA.

If you are 66 and assume that means you can collect your benefit in full, that is not necessarily true. Filing before your FRA can permanently reduce what you receive.

Full retirement age is no longer 66 for everyone

Social Security’s FRA used to be 66. For anyone born in 1960 or later, however, it is 67.

So if you are age 66 and decide to claim benefits, you are filing one year early. That typically means a permanent reduction of about 6.7% in your monthly check.

While that cut is much smaller than claiming at 62, when benefits can drop by roughly 30%, it can still matter a great deal. If Social Security will make up most of your retirement income, or if you have no other income to lean on, even a one-year-early filing decision can affect your finances for years.

There are also less obvious consequences. Social Security benefits can receive annual cost-of-living adjustments, or COLAs, to help keep up with inflation. If your starting benefit is lower because you filed early, those future increases will also be based on a smaller amount.

And if you are the higher earner in your household and you die before your spouse, your spouse is typically entitled to survivor benefits equal to 100% of the monthly benefit you were receiving. A reduced benefit would also mean less income for your spouse later on.

Know your FRA before you file

Sometimes claiming a year early is a deliberate choice because you need the income or want to use it for a specific purpose. But it is very different to file early without realizing it and give up 6.7% of your benefits for life.

That is why it is important to know your FRA before submitting your application. At present, FRA is 67 for anyone born in 1960 or later, which makes it fairly easy to remember. Even so, Congress could change it in the future, especially given Social Security’s funding challenges and the possibility of policy changes to address them.

Staying aware of possible changes can help you avoid filing at the wrong time and prevent an unnecessary reduction in your benefits.