Are you about to lose thousands in retirement? What they’re not telling you about Social Security

A growing number of Americans are rethinking the long-held advice to delay claiming Social Security retirement benefits until age 70. With projected cuts to the program looming, market uncertainties, and evolving personal priorities, more people are opting to file as early as age 62, despite the financial trade-offs.

The latest report from the nonpartisan Committee for a Responsible Federal Budget warns that without Congressional action, benefits could be reduced by 19 percent to 23 percent as early as 2034. That’s when the program’s trust fund, which currently holds about $2.7 trillion in assets, is expected to run out of reserves.

"If these projections hold, retirees will face across-the-board payment cuts," said Maya MacGuineas, president of the Committee. “It's no longer a theoretical debate, the window for reform is rapidly closing.”


Social Security’s design offers higher monthly payments the longer recipients wait to claim, up to a 25 percent increase by age 70 compared to benefits at full retirement age (between 66 and 67, depending on birth year). But those who start at 62 face a permanent reduction of around 30 percent.

Still, there are compelling reasons to claim earlier:

• Some retirees can invest benefits elsewhere, potentially earning better returns than the program itself, which historically yields about 2.5 percent–6 percent annually.
  
• Working while receiving early benefits reduces payments temporarily, but the Social Security Administration adjusts future payments upward to compensate, though this process can be complex, especially for self-employed individuals.
  
• And for many, health concerns or shorter life expectancy mean it simply doesn’t make sense to wait.
  

Critics argue that claiming early can lock retirees into lower lifetime income, especially if they live longer than expected. But in an era of fiscal uncertainty, others view it as a practical hedge.

Financial planner Olivia Greene says the trend reflects a deeper shift: “People want flexibility. They’re not just doing math, they’re making life choices. And Social Security, once seen as a steady promise, now comes with real risks.”

Lawmakers on both sides of the aisle acknowledge the urgency, but no consensus has emerged on how to restore solvency, whether through tax hikes, benefit formula changes, or raising the full retirement age again.