People born in 1959 reach Social Security’s full retirement age at 66 and 10 months. People born in 1960 do not get there until 67, and the first of them cross that line in 2027.
For everyone born in 1960 or later, full retirement age is 67, ending a schedule that began with the 1955 birth year at 66 and 2 months.
The change matters most to anyone who plans to claim early and keep working.
According to the Social Security Administration, claiming at 62 with a full retirement age of 67 cuts a retirement benefit by 30%, which turns the agency’s example $1,000 benefit into $700. A spousal benefit drops 35%, from $500 to $325 in the same example.
The 2027 earnings limit
Anyone collecting benefits before full retirement age can run into the earnings test. For 2027, the SSA lists a limit of $25,560 for people who are under full retirement age for the entire year. Above it, the SSA withholds $1 in benefits for every $2 earned.
Take a 63-year-old who claims and earns $45,000 in 2027. That is $19,440 over the limit, so about $9,720 in benefits would be withheld. Many pre-retirees now plan to semi-retire, and part-time pay is exactly what trips this test.
The year you reach full retirement age
A higher limit applies in the calendar year you reach full retirement age: $67,920 for 2027, with $1 withheld for every $3 above it. Only earnings through the month before you reach full retirement age count toward that limit.
Someone who earns $80,000 in the months before turning 67 in 2027 would be $12,080 over the limit. About $4,027 in benefits would be withheld. Starting in the month you reach full retirement age, earnings no longer reduce your benefits.
Withheld benefits are not forfeited
The SSA says it recalculates your benefit at full retirement age to give you credit for the months it reduced or withheld payments. The test changes when money arrives, with smaller checks first and a larger one later, rather than erasing it.
Waiting past full retirement age adds more. The SSA’s schedule gives people born in 1943 or later an 8% increase for each year of delay until age 70, or two-thirds of 1% per month. For someone with a full retirement age of 67, 36 months of waiting works out to about 24% more per month than at 67.
Claiming age and the rest of your withdrawals
Health, a spouse’s record and other income all feed into when to claim Social Security, and the answer shapes how much comes out of IRAs and 401(k)s to cover the gap. If you have $100,000 or more in investments, you can use SmartAsset to get matched, at no cost, with up to three fiduciary advisors.
The questionnaire takes about 10 minutes and asks for a phone number near the end. You control whether and when you respond to anyone.
Before any of that, pull your own numbers. Your Social Security statement shows your benefit at 62, at full retirement age and at 70, and your expected 2027 earnings are the only other number the earnings test needs.
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