The Social Security system, established in 1935, undergoes regular adjustments to maintain solvency. A key change taking effect in 2026 is the increase of the full retirement age (FRA) to 67 for those born in 1960 or later. This shift has been legislated since 1983, yet many are unaware of its implications.
The Full Retirement Age Explained
Full retirement age determines the standard Social Security benefit amount. For decades, this age was 65, but in 1983, Congress adjusted it to address growing imbalances in the system. As life expectancy increased, so did the strain on Social Security payouts. Raising the FRA was a way to mitigate this without immediately cutting benefits.
The change wasn’t abrupt. For those born between 1943 and 1954, FRA was 66. Since 1955, it has increased by two months each year. This means individuals born in 1956 had an FRA of 66 years and four months, and so on. By 2026, anyone born in 1960 or later will have an FRA of 67.
Why It Matters: Benefit Reductions
Filing for Social Security before FRA results in permanent benefit reductions. The Social Security Administration (SSA) reduces payments by five-ninths of 1% for each month claimed early, up to a maximum of 36 months. Filing more than three years early incurs an additional reduction of five-twelfths of 1% per month.
For example, claiming at age 66 in 2026 will result in receiving only 93.33% of the primary benefit. If the full benefit is $2,000 per month, the payout will be $1,866.60 instead. Filing at age 62 would reduce the benefit even further, potentially down to around $1,400.
What Retirees Should Do
The increase to FRA 67 doesn’t alter eligibility or filing options. Individuals can still claim benefits as early as 62 or delay them until age 70 for increased payments. However, those expecting full benefits at age 66 in 2026 will face a roughly 7% reduction unless they wait one more year.
The key takeaway is that the FRA change is not new; it’s a long-planned adjustment. Retirees need to be aware of this shift to avoid unintended benefit cuts.
Delaying retirement, even by a year, can significantly impact long-term financial security. Understanding these changes and planning accordingly is essential for maximizing Social Security benefits.
