There’s been some chatter on social media lately about Social Security that I think is bad advice.
The message is that you are better off claiming as early as possible — at age 62 — rather than waiting to collect a larger benefit by starting your checks later.
That’s just not good advice. Let’s review the facts that sometimes get lost in all those social media posts.
There are really only two circumstances where claiming early makes genuine sense.
- The first is if you have health issues today that make it unlikely you will live into your mid 80s and beyond.
- The second is if you actually need the income earlier, such as if you can’t continue to work, or don’t have retirement savings you can tap into.
If neither of those applies, please listen up on why you will likely be much better off delaying when you start your Social Security benefit.
A 30% Penalty You Can Never Undo.
For anyone born in 1960 or later, your Full Retirement Age is 67. That is when you are entitled to 100% of your earned Social Security benefit. If you choose to start collecting at 62, you receive just 70% of that benefit — a 30% reduction that is locked in permanently. Claiming early is basically accepting a 30% penalty.
Break-Even Is the Wrong Way to Think About This.
Proponents of early claiming love to talk about “break-even age.” Their argument goes like this: if you start collecting at 62, you bank years of payments before someone who waits until 67 even begins collecting, and it takes until roughly age 79 for the person who delayed their start date to catch up in total payments to what the early claimer has collected.
That’s true. But it is the wrong way to frame the decision.
Waiting to collect a larger benefit is not a gamble — it is insurance against the very real possibility of living a long time. A woman in average health who reaches age 65 has a life expectancy of 88. That means a 50% probability of still being alive at 88 — still here, still paying bills, still needing income. If she reaches her break-even age of 79, there is a very real chance she has at least another decade or more ahead of her. Every month past that break-even point, the person who waited is collecting meaningfully more.
Claiming Early Does Not Protect You From Future Benefit Cuts
An argument making the rounds is that you should claim early because Social Security may not be able to pay full benefits after 2034 or 2035 unless Congress acts. The fear is understandable, but the reasoning doesn’t hold up.
Current projections suggest that if Congress does nothing, Social Security would pay out roughly 80% of scheduled benefits — a 20% reduction. That is the worst case. And as I have discussed before, Social Security has survived funding challenges before; in the early 1980s, Washington found solutions that did not require beneficiaries to absorb the full cost. But let’s take the worst-case scenario seriously and run the numbers.
If your benefit at 67 would be $2,000, claiming at 62 locks in a $1,400 monthly payment. After five years of cost-of-living adjustments, that might grow to roughly $1,575 by the time you reach 67.
Now apply the 20% worst-case cut to both. The person who waited until age 67 might see their benefit reduced from $2,000 to $1,600. The early claimer collects around $1,260. The person who waited still comes out ahead — by more than $300 a month, every month for the rest of their life. Claiming early doesn’t protect you from the cut. It just means absorbing it from a lower starting point.
The Strongest Move: Wait Until 70
Every year you delay between your FRA and age 70 increases your benefit by 8%. Wait all three years and your benefit is 24% larger than at 67 — and more than 75% larger than at 62. A $2,000 benefit at 67 becomes $2,480 at 70, compared to $1,400 at 62. That difference, collected every month for decades, is not trivial.
If you are married, please have the higher earner wait as long as possible — ideally until 70. The surviving spouse receives the larger of the two benefits. Making that number as large as possible is one of the most important financial gifts you can leave your partner.
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