Full Retirement Age Hits 67 in 2026: How This Change Can Cut Your Check
Did you just turn 62 and start dreaming about retirement? You might be thinking about claiming Social Security soon. However, there's something important you need to know first. The full retirement age is changing in 2026. This shift could take a bigger bite out of your monthly check than you expected.
So, what does this mean for your benefits? How much could you actually lose? Let's break it all down in simple terms.
What Is Full Retirement Age?
Full retirement age is the age when you can claim 100% of your Social Security benefits. It's also called FRA. This is the magic number the Social Security Administration uses to calculate your payments.
If you claim benefits before reaching FRA, your check gets reduced. On the other hand, if you wait past FRA, your benefits increase. Therefore, knowing your exact full retirement age matters a lot.
Why Is the Full Retirement Age Changing?
The full retirement age hasn't always been 67. In fact, it used to be 65 for everyone. However, Congress changed that back in 1983. They passed reforms to keep Social Security financially stable for longer.
As a result, the FRA has been gradually increasing over the years. For people born in 1954 or earlier, it was 66. Then it started rising by two months for each birth year after that.
Now, here's the big news. For anyone born in 1960 or later, the full retirement age officially becomes 67. This change fully takes effect in 2026. So if you're turning 62 next year, this applies to you.
How Does This Affect Your Benefits?
This is where things get tricky. Many people still plan to claim Social Security at 62. After all, that's the earliest age you can start receiving benefits. However, claiming early comes with a penalty.
Here's how it works. If your FRA is 67 and you claim at 62, you're claiming five years early. That means your benefits get reduced by about 30%. In other words, you'll only receive 70% of your full benefit amount.
Let's put that into real numbers. Say your full benefit at 67 would be $2,000 per month. If you claim at 62 instead, you'd only get around $1,400. That's $600 less every single month. Over a 20-year retirement, that adds up to $144,000 in lost benefits.
The Reduction Schedule Explained
The Social Security Administration uses a specific formula to calculate early claiming reductions. It's not just one flat percentage. Instead, the reduction depends on how many months early you claim.
For the first 36 months before FRA, your benefit drops by 5/9 of 1% per month. After that, each additional month reduces it by 5/12 of 1%. This might sound complicated. However, the bottom line is simple. The earlier you claim, the more you lose.
Here's a quick breakdown for someone with an FRA of 67:
- Claim at 62: 30% reduction
- Claim at 63: 25% reduction
- Claim at 64: 20% reduction
- Claim at 65: 13.3% reduction
- Claim at 66: 6.7% reduction
- Claim at 67: Full benefit (no reduction)
What If You Wait Past 67?
Now let's look at the other side. What happens if you delay benefits past your FRA? You actually earn delayed retirement credits. These credits increase your benefit by 8% per year until age 70.
So if your full benefit is $2,000 at 67, waiting until 70 could boost it to $2,480. That's an extra $480 per month for the rest of your life. Therefore, patience can really pay off here.
Who Should Claim Early Anyway?
Despite the reductions, claiming at 62 still makes sense for some people. For instance, you might need the income immediately. Maybe you lost your job or have health issues. In these cases, waiting simply isn't realistic.
Additionally, some people have shorter life expectancies. If you don't expect to live into your 80s, claiming early could mean more total benefits over your lifetime. There's no one-size-fits-all answer here.
How to Prepare for This Change
First, check your estimated benefits on the Social Security website. You can create an account at ssa.gov and see your projected amounts at different claiming ages. This will give you a clear picture.
Second, consider your other retirement income. Do you have a 401(k) or pension? These sources might let you delay Social Security longer. The more you can wait, the bigger your check becomes.
Third, talk to a financial advisor. They can help you run the numbers based on your specific situation. A small investment in advice now could mean thousands more in retirement.
Common Mistakes to Avoid
Many people make costly errors when claiming Social Security. Being aware of these pitfalls can protect your retirement income.
First, don't assume 62 is the best age to claim. Yes, it's the earliest option. However, early claiming locks in permanent reductions. Take time to calculate what you'd actually receive at different ages.
Second, avoid ignoring spousal benefits. If you're married, your claiming decision affects your spouse too. Survivor benefits depend on when you claim. A hasty decision could leave your partner with less income later.
Third, don't forget about taxes. Many retirees are surprised to learn Social Security can be taxable. If your combined income exceeds certain thresholds, up to 85% of your benefits may be taxed. Factor this into your planning.
Fourth, stop relying on outdated information. Rules change over time. What worked for your parents might not work for you. The FRA increase to 67 is a perfect example of this.
Finally, don't overlook the earnings limit. If you claim early and continue working, your benefits may be temporarily reduced. Once you reach FRA, this limit disappears. Plan your work schedule accordingly.
Final Words
The full retirement age hitting 67 in 2026 is a significant milestone. It affects millions of Americans planning their retirement. Understanding this change is the first step toward making smart decisions.
Don't let this shift catch you off guard. Instead, plan ahead and know your options. Your future self will thank you for it.
