'Only 8% to 10% of people wait until age 70 to claim'
"Am I wrong to advise my clients to claim early to avoid disappointment later?" (Photo subject is a model.)
Dear Quentin,
I'm a certified public accountant and I have a strong opinion on Social Security. This article on MarketWatch explains why I advise my clients to claim Social Security sooner rather than later. As the article points out, if Congress doesn't act, Social Security's Old-Age and Survivors Insurance trust fund is projected to be depleted in 2032, which would lead to people receiving only 78% of expected benefits.
In other words, take the money while you can, because future benefits are always subject to risks that today's benefits are not. At the end of the day, only 8% to 10% of people wait until age 70 to claim. Am I wrong to advise my clients to claim early to avoid disappointment later? What do you think of my approach?
A Concerned CPA
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You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com. The Moneyist regrets he cannot reply to questions individually.
There are so many "ifs."
Dear CPA,
You're taking a risk by claiming early - and you're taking a risk if you don't.
If you claim Social Security at age 62 instead of waiting until 67, your monthly benefit will be permanently reduced by up to 30%, and reduced by up to 40% based on the amount you would receive by waiting three years beyond that. If Congress doesn't act to shore up the program's finances, yes, you could end up losing another 30% on top of that in 2032. So in six years, you could end up with a double whammy of lost income.
If you do wait, yes, you're forgoing those next six years of benefits, but if Congress doesn't act, you'll still end up with that same chunk taken out of your expected payments. You're damned if you do, and damned if you don't. For that reason, I suggest making the decision on whether to claim at age 62, 67, 70 or any age in between based on personal factors.
If, if, if. There are so many "ifs." Let's say you are due to receive a $1,000 Social Security benefit at 67, your full retirement age. You would receive around $1,240 per month, or 24% more, if you decided to wait until age 70. At that rate, you would break even when you reach age 79, or thereabouts. If you think you will live longer than that, it may be worth delaying claiming benefits.
Whether you delay is a personal decision and is wholly dependent on whether you would like to start receiving your Social Security benefits early and on when you decide to retire. Virtually all American workers ages 45 to 62 should wait until after 65 to collect Social Security, according to the advice from this working paper from Boston University and the Federal Reserve Bank of Atlanta.
Sure, it's easy to get spooked by politics, making it more tempting to take the money at 62, especially if you believe you'll collect six years' worth of full contributions before that reduction in benefits kicks in (assuming it does kick in). More than 90% of people should wait until they reach 70, yet just over 10% appear to do so, the Boston University/Fed report said. Of course, it really depends on your own income and expected longevity.
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Divided opinion
Moneyist readers are divided and, as always, their own expectations, health and expected longevity play a role in their decisions. "Taking it now," one reader wrote. "Seven more years of payments. For me, seven was the break-even amount. Who knows the future." Another wrote, "This is a scare tactic. Yes, funding is at risk. BUT funding will be renewed."
I can understand why people might choose either route, but 78% of a larger benefit for those who choose to wait is going to be more than 78% of an already reduced benefit. The actual reason for delaying versus waiting remains the same, regardless of the political backdrop: Do you need the money now? And do you expect to live into your 80s, when you will break even for waiting?
Some readers are tempted to take Social Security as early as they can, at 62, and invest it in the stock market, which can be useful if those market returns are 7% to 10% a year. I can understand that doing so gives them at least a sense of more control. Others, with less risk tolerance, prefer to wait until their full retirement age or even age 70 to secure a higher monthly benefit.
The Social Security Administration encourages people to delay claiming by offering a bump in payments if they wait. As you point out, however, the Social Security Administration says that most people claim before they reach their 70th birthday, with over half of all retirees choosing to accept permanently reduced benefits. Why? If they need the money, they take it.
Ultimately, that's the reason for anyone to take their benefits early. You may or may not be proved correct about the much-feared shortfall in 2032, but those are your fears, not those of your clients, and I believe everyone should be free to make up their own mind. Lay out the risks for your clients - longevity, health, age, political backdrop - and allow them to decide for themselves.
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Two different funds
The Congressional Budget Office released a report earlier this year estimating that the Old-Age and Survivors Insurance trust fund will be exhausted in 2032. "Under current law, the Social Security Administration cannot pay benefits in excess of the available balances in a trust fund, borrow money for a trust fund, or transfer money from one trust fund to another," the CBO noted.
Congress has in the past adjusted the payroll-tax allocations between trust funds when needed. The Old-Age and Survivors Insurance trust fund pays monthly Social Security retirement benefits to eligible retired workers and their families. Eligibility requires a sufficient work history and earned work credits - typically 40 credits, or about 10 years of work.
The Social Security Disability Insurance is a federal program that provides cash benefits to disabled workers and their eligible dependents. Both OASI and SSDI are funded primarily through payroll taxes, which also support benefits for retirees, disabled workers and their survivors.
The good news: The SSDI trust fund is good until 2099, but once claimants reach their full retirement age for Social Security, their benefits are paid out of the OASI fund. In the past, Congress has acted to prevent a shortfall to the OASI fund. Based on past experience, it would be reasonable, if not safe, to assume it will do so again.
The Committee for a Responsible Federal Budget, a nonprofit, says that Social Security is "racing towards insolvency" and that President Donald Trump's One Big Beautiful Bill Act reduced the revenue flowing into the Social Security trust fund. "Upon insolvency, Social Security is legally required to reduce outlays to match revenues," the report said.
Do what you believe is best for you, and the next person can do the same.
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-Quentin Fottrell
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June 26, 2026 11:52 ET (15:52 GMT)
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