The full retirement age for Social Security has been increasing slowly over the years, and another important change will be fully felt in 2027. For people born in 1960 or later, the full retirement age is 67.
This is important because the age at which you start claiming Social Security can have a major effect on how much money you receive every month for the rest of your life. Claiming your benefits before reaching your full retirement age usually means accepting a permanently smaller monthly payment.
For many years, Americans often thought of 65 as the normal retirement age. However, Social Security rules have gradually changed, and that age no longer applies to everyone.
People born in 1960 are the first birth-year group whose standard full retirement age is 67. This means people in this group will begin reaching that milestone in 2027.
There is an important detail involving people born on the first day of a month. Social Security has special rules for determining a person’s age for benefit purposes. Because of this, someone born on January 1, 1960, can be treated differently from someone born on January 2, 1960.
For most people born in 1960, however, age 67 is the key number to remember.
This can make a surprisingly large difference to your retirement income.
For example, imagine that you were born in 1960 and your full Social Security retirement benefit would be $2,000 per month at age 67. If you mistakenly believe your full retirement age is 66 and decide to start collecting benefits one year early, your monthly payment would be reduced.
A person claiming 12 months before a full retirement age of 67 would generally receive about 6.7% less. On a $2,000 monthly benefit, that could mean receiving roughly $1,867 instead.
That is around $133 less every month.
It might not sound like a huge amount at first, but the difference becomes much more noticeable over time. A reduction of around $133 per month works out to about $1,596 per year. Over 20 years, that would amount to nearly $32,000, even before considering other factors.
More importantly, the reduction for claiming early generally does not disappear when you later reach age 67. Your benefit remains reduced because you chose to start receiving it early.
This is why knowing your correct full retirement age before applying for Social Security is so important.
Your exact birthday can also matter.
Under Social Security rules, a person born on the first day of a month is generally treated as having reached a particular age in the previous month. For example, someone born on January 1, 1960, may be treated as though their birthday occurred in December 1959 for Social Security purposes.
That can affect the person’s full retirement age and when they qualify for their full benefit.
Because of rules like this, simply looking at your birth year may not always give you the complete picture. Checking your exact date of birth with the Social Security Administration can help you avoid making a costly mistake.
There can also be a very large difference between claiming Social Security as early as possible and waiting until later.
For someone whose full retirement age is 67 and whose full benefit would be $2,000 per month, claiming at age 62 could reduce the payment to around $1,400 per month.
Waiting until age 67 would provide the full $2,000 monthly benefit.
If the same person delayed claiming until age 70, delayed retirement credits could increase the benefit to around $2,480 per month.
That means the difference between claiming at 62 and waiting until 70 could be around $1,080 every month in this example.
Over a single year, that is a difference of almost $13,000.
However, this does not automatically mean everyone should wait until age 70. Retirement decisions depend on individual circumstances.
Some people may need Social Security earlier because they have stopped working and need the income. Others may have enough savings, pension income or employment income to delay claiming. Health, family circumstances, expected retirement expenses and other sources of income can also influence the decision.
The important thing is to understand what happens to your benefit before making the choice.
Full retirement age is essentially the age when you become entitled to 100% of the retirement benefit calculated from your earnings record.
You can generally start Social Security retirement benefits as early as age 62, but starting that early means accepting a reduced monthly amount.
On the other hand, delaying benefits beyond your full retirement age can increase your monthly payment through delayed retirement credits. Those increases continue until age 70. There is generally no additional retirement benefit increase for delaying beyond age 70.
Cost-of-living adjustments, commonly called COLAs, are another reason the starting amount matters. Social Security periodically adjusts benefits to account for inflation. Those adjustments build on the benefit amount you are entitled to receive, so decisions about when to claim can continue affecting the size of your payments many years into retirement.
Before applying, it is therefore worth checking your own numbers instead of relying on what happened when your parents or older relatives retired.
The Social Security Administration provides tools that allow workers to check their full retirement age and estimate their future benefits.
A personal Social Security account can also provide estimates based on your actual earnings record. You can compare approximately how much you could receive if you start benefits at 62, at your full retirement age, or at 70.
Seeing those figures side by side can make the decision much easier to understand.
For example, if your estimate shows $1,400 at 62, $2,000 at 67 and $2,480 at 70, you can consider those amounts alongside your savings, pension, work plans and expected expenses.
You should also check your Social Security earnings record. Your eventual retirement benefit is based largely on your work and earnings history, so errors or missing earnings could affect the amount calculated for you.
The biggest mistake is simply assuming that the retirement age that applied to someone else also applies to you.
Someone who retired years ago may have had a full retirement age of 65, 66, or somewhere between 66 and 67. For people born in 1960 or later, however, the standard full retirement age under current law is 67.
So if you are approaching retirement in 2027 or in the years that follow, check your exact full retirement age before submitting your claim.
Even a difference of several months can affect your monthly benefit, while a difference of several years can result in hundreds of dollars more or less each month.
There is no single claiming age that is right for every person. Someone who needs income immediately may have good reasons to claim earlier, while another person may decide that delaying benefits better fits their financial plans.
What matters is making the decision with the correct information.
Knowing your full retirement age, checking your estimated monthly payments and understanding the permanent effect of claiming early can help you make a more informed decision about your retirement income.
For people born in 1960 and later, 67 is now the important full retirement age to remember. As 2027 approaches, millions of Americans nearing retirement should make sure they understand that rule before deciding when to start collecting their Social Security benefits.
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