If you were born in 1960, 2026 is the year everything changes. You’ll turn 66, most people assume that’s “retirement age,” but it’s not. Your Full Retirement Age (FRA) is actually 67, meaning you’re still one full year away from 100% of your Social Security benefit. This single rule, locked in decades ago, is quietly becoming one of the biggest retirement shocks for the class of 1960. Here’s exactly how it affects you and what you must do before December 31, 2026.
1. Your Official Full Retirement Age: 67 (Not 66, Not 65)
- Born 1959 → FRA = 66 years + 10 months (late 2025–early 2026)
- Born 1960 → FRA = exactly 67 (2027)
Turning 66 in 2026 puts you 12 months short of full benefits.
2. The 2026 Penalty Table – Claiming at 66 Costs You Forever
| Age You Claim in 2026 | Months Early | % of Full Benefit | Lifetime Cost* |
|---|---|---|---|
| 62 (already possible) | 60 | 70% | $150,000+ |
| 66 | 12 | 93.3% | $40,000–$80,000 |
| 67 (2027) | 0 | 100% | $0 |
| 70 (2030) | +36 | 124% | +$150,000+ |
*Approximate over 25–30 years at average benefit levels
That 6.7% cut for claiming at 66 in 2026 is permanent and also reduces widow(er) benefits later.
3. The 2.8% COLA in January 2026 Helps – But Only If You Wait
Every check rises 2.8% starting January 2026. Average retiree payment jumps from ~$1,927 to ~$1,981. Maximum FRA benefit rises from $4,018 to $4,152. But if you claim reduced benefits at 66, the COLA is applied to your smaller base forever. Waiting until 67 (or 70) means every future COLA compounds on a bigger number.
4. Earnings Test Becomes Friendlier in 2026
Working while collecting early? The 2026 limits are the highest ever:
| Situation | 2026 Earnings Limit | Penalty |
|---|---|---|
| Under FRA all year | $24,480 | $1 kept for every $2 over |
| Year you reach FRA (2027 for you) | $65,160 | $1 kept for every $3 over |
| After FRA | Unlimited | None |
Good news: any benefits withheld because of earnings are added back once you hit 67.
5. Medicare Started at 65 – Now You Face a Two-Year Income Gap
You got Medicare in 2025 (age 65), but full Social Security doesn’t start until 2027. That leaves 2026 as an expensive “in-between” year where many people burn through savings or take reduced benefits just to pay bills.
6. Unemployment Risk Peaks Right When You Need Work Most
Federal Reserve studies confirm the FRA increase to 67 raised unemployment for ages 62–66 by 1.5–2 percentage points. Construction, manufacturing, nursing, and trucking workers are hit hardest. If you lose your job at 64–66, finding another at the same pay is brutally difficult.
7. Another FRA Increase (68 or 69) Is Already on the Table
The 2025 Trustees Report says benefits drop 23% in 2035 without reform. Raising FRA again is the path of least political resistance. Today’s 50-year-olds should plan for 68–69; today’s 66-year-olds should treat 67 as the absolute minimum.
Your 2026–2027 Decision Checklist (Born 1960)
| Timeline | Age | Milestone | Best Move Right Now |
|---|---|---|---|
| Jan–Dec 2026 | 66 | Still under FRA | Keep working or build cash bridge |
| 2026 | 66 | 2.8% COLA applied | Delay claiming if possible |
| All of 2027 | 67 | Full benefits unlocked | Claim at 67 or continue delaying to 70 |
| 2030 | 70 | Maximum possible benefit | Ideal target for healthy individuals |
The Bottom Line for the Class of 1960
Turning 66 in 2026 feels like retirement age, but the government moved the goalposts. Claiming then costs you 6.7% forever; claiming earlier costs far more. The people who win are those who can bridge the gap to 67 or 70 with savings, part-time work, or spousal strategies. The people who lose are those who run out of money or health and are forced to file early.
Run your exact numbers today at ssa.gov/myaccount. Save aggressively in 2025–2026. Line up flexible income. Because for the first time in history, “retirement age” and “full Social Security age” are no longer the same thing — and that gap could cost you six figures.