With the holiday season here, the temptation to file for Social Security and start the new year with an extra check is high.
Yet for many people in their mid‑60s, especially those born in 1959 and 1960, waiting a few more months — into early 2026 — can reduce or avoid permanent cuts to their retirement income.
While 66 was once considered full retirement age (FRA), that target has shifted. Today, those born in 1959 do not qualify for their full benefit until age 66 and 10 months, and those born in 1960 must wait until age 67.
Filing before the precise month you reach your FRA locks in a permanent reduction in your monthly check, which can add up over a retirement that may last decades.
Strategic timing is, therefore, one of the most effective ways to give yourself a raise in retirement. By understanding how the Social Security Administration calculates early‑filing penalties and how the higher 2026 earnings limits work, you can make a more informed choice about when to claim.
The reality of the early filing penalty
Filing even a few months early — meaning a few months before reaching your full retirement age — triggers a permanent reduction in your monthly check
The government deducts 5/9 of 1% from your monthly benefit for each month you are early, up to 36 months. If you file more than three years early, the reduction formula changes to 5/12 of 1% for each month beyond month 36.
If you are 66 at the end of 2025, you are likely close to your FRA, depending on your birth month. By waiting until 2026, you move closer to your target age, effectively avoiding additional months of early-filing reductions.
For example, a worker born in 1960 who claims at age 66 in 2026 is still one year away from their FRA of 67, resulting in a permanent reduction of 6.7% (5/9 of 1% x 12 months). However, if they had claimed at 65 in 2025, that reduction would have been double, 13.3% (5/9 of 1% x 24 months).
A higher starting benefit also means future cost-of-living adjustments apply to a larger base.
Higher 2026 earnings limits offer relief
For many Americans who plan to continue working while collecting benefits, the transition to 2026 brings financial relief. That’s because the earnings limit — meaning the amount of money you can make before some of your Social Security benefits are withheld — increases each year.
For 2025, the earnings limit is:
- $23,400 for those who will reach full retirement age after 2025
- $62,160 for those who reach FRA during 2025
In January, the limit will rise to $24,480 for those who will reach their FRA after 2026, and $65,160 for those who reach that age during 2026.
Benefits withheld due to the earnings limit are not lost forever. Once you reach your FRA, your monthly benefit is increased permanently to account for months in which benefits were withheld.
The earnings test also disappears once you reach your FRA: You can work as much as you want without having benefits withheld.
Maximizing credits and survivor protections
If you have already reached your full retirement age and are simply waiting to claim Social Security to boost your check further, the incentives for holding off until 2026 are even stronger.
For every year you delay claiming beyond your FRA, your benefit increases by 8% due to what are known as delayed retirement credits. Many financial planners view this as a powerful form of longevity insurance that is difficult to replicate in traditional investment markets.
When you claim benefits can also affect your household, not just your own check. For example, survivor’s benefits are typically worth 100% of the deceased spouse’s monthly benefit. So waiting to claim Social Security can mean a larger survivor’s benefit for your spouse if your spouse outlives you, provided that the survivor’s benefit would be greater than your spouse’s own retirement benefit amount.
Furthermore, postponing claiming benefits can help you manage your monthly cash flow as other costs shift. For instance, Medicare premiums are typically deducted from Social Security payments. So the bigger your payment, the more money you will have left over after your premiums are deducted.
Building a stronger retirement foundation
Deciding when to flip the switch on Social Security is a personal decision that requires a look at your current cash flow, your health, and your long-term goals.
If you have yet to reach your full retirement age, confirm what it is based on both your birth year and birth month. You can find it on your Social Security statement.
Then count how many months away it is so you know exactly how many months of early‑filing reductions you avoid by waiting.
If in doubt, consider consulting a financial advisor. If you have more than $100,000 in savings, SmartAsset offers a free service that matches you to a vetted, fiduciary advisor legally bound to act in your best interests.
Taking control of your retirement timeline is about maximizing the resources you have spent a lifetime building.
Sources
SSA (COLA); SSA (exempt amounts); SSA (age reduction); CMS; Kiplinger
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