If you’re 62 or older, determining when to claim Social Security benefits is one of the most consequential financial decisions you’ll ever make. The timing can have a profound impact on your retirement income for the rest of your life, as well as the financial security of your spouse. Now, with concerns rising about the looming insolvency of the Social Security trust fund, the decision has become even more unnerving, leading a growing number of people to file early — at a potentially high cost to their long-term financial health.
The development reverses a decades-long trend of older Americans delaying to claim Social Security benefits. The number of applications for benefits rose by more than 276,000 from October 2024 through April 2025, versus the same period a year earlier, according to the Urban Institute, a Washington, D.C., think tank, and were on track to rise 15% for the fiscal year ending Sept. 30. And it is not just lower-income Americans who have been applying in droves. Social Security data for the first half of fiscal 2025 indicates that the agency received more early claims from higher earners than it had the previous year as well.
The rate of increase did slow for the remainder of 2025, with filings rising 8% for the full calendar year, the Urban Institute found. Still, that’s a big jump from 2024, when the number of people who filed for benefits rose just 1.8%.
“We may be seeing more of a generalized anxiety over the health of Social Security,” says Jack Smalligan, senior policy fellow for the Urban Institute, of decisions on when to claim Social Security. “Some people are choosing to file early because they’re concerned about the state of the program going forward.”
A recent survey by AARP bears that out. Roughly half of Americans who claimed earlier than planned in the past year or are considering filing early said they were motivated by fears that Social Security is running out of money. Other factors include higher-than-average inflation, which has put a squeeze on retirees’ budgets, and a peak wave of baby boomers reaching retirement age.
The debate over when to file for Social Security isn’t new. Some retirees have long believed they should file for benefits as soon as they’re eligible, while others are determined to wait. But concerns and misinformation about the future of the system have made it even more challenging to make a sound decision.
Here’s a look at the facts and some expert guidance to help make the choice that’s right for you.
The payoff for waiting
You can claim Social Security benefits as early as age 62. But filing then will result in a monthly payout up to 30% lower than the amount you’ll receive if you wait until full retirement age (FRA), which is 66 for people born in 1943 and gradually increases to 67 for those born in 1960 or later. Holding off at least until you hit your FRA will also get the most out of the annual cost-of-living adjustment because of the magic of compounding: Each annual COLA will be applied to a larger amount of money.
You have a limited ability to change your mind. During the first 12 months after you file your claim, you can withdraw, repay the benefits you’ve received to that point, and refile at a later date. But after that first year is up, the decision is irrevocable.
In addition, if you file for benefits before FRA and continue working — or go back to work after taking early retirement — Social Security will withhold $1 for every $2 you earn over a certain annual amount; for 2026, it’s $24,480. In the year you reach FRA, Social Security will withhold $1 for every $3 you earn over a higher limit, which is $65,160 in 2026. Once you reach FRA, the earnings test disappears, and Social Security will recalculate your benefits to credit you for the amounts withheld.
Waiting until you reach full retirement age to claim entitles you to the total amount of benefits you’ve earned, based on your lifetime earnings record, and you won’t have to worry about the earnings test. If you can afford to delay even longer, you’ll receive an 8% delayed-retirement credit for each year you postpone claiming benefits until age 70.
Workers who reach full retirement age at 67, for example, will receive a 24% increase in benefits by waiting until age 70 to file. An analysis by the National Bureau of Economic Research found that “virtually all” workers between the ages of 42 and 62 would end up with a higher amount of lifetime discretionary spending by waiting until 65 to file for benefits, and 90% would benefit by waiting until age 70.
If you can afford it, delaying benefits until age 70 “is excellent longevity insurance,” says David Haas, a certified financial planner with Cereus Financial Advisors in Franklin Lakes, New Jersey. “As you get older, you want to have those COLAs adjusted on the highest amount possible.”
The insolvency factor
But there’s math and then there’s reality. Nearly 30% of Social Security recipients elect to take benefits at age 62, and only 10% wait until they’re 70, according to a 2024 study by the Bipartisan Policy Center, a Washington, D.C., think tank.
There can be compelling reasons to claim before age 70 — or even as early as 62. But fear of insolvency isn’t one of them, says Clark Randall, a CFP with Creekmur Wealth Advisors in Dallas. If Congress doesn’t act — which experts say is unlikely, because Social Security is extremely popular, and lawmakers like to get reelected — the trust fund is projected to run out of money by 2034. That doesn’t mean, though, that benefits would disappear. Social Security will still be funded by payroll taxes and continue to pay benefits, but reduced by about 23%. “The idea that Social Security is going to run out of money is a very real fear but not a real risk,” Randall says. “It’s not even possible the way it’s set up.”
Even if you’re convinced the trust fund will be depleted, you’re still better off waiting to file for benefits, Randall says, because any reduction in benefits would be calculated on a larger amount. For example, if claiming a $2,480 monthly benefit at age 70 is better than claiming a $2,000 monthly benefit at 67 before the 23% across-the-board benefit reduction, it’s still the best choice after the benefit reduction, he says, because it would result in a monthly payment of about $1,910 at age 70 instead of $1,540 at 67.
“Neither is as good as not having a benefit reduction, but they are both equally reduced,” Randall says.
Investing the benefits
The strong performance of the stock market recently may also have affected the increase in Social Security claims. Some retirees believe they’ll capture a higher rate of return by claiming benefits at 62 and investing the money — a strategy that has gotten a lot of traction on social media lately.
It’s a risky bet. In order to beat Social Security’s annual COLA, combined with the guaranteed 8% annual return for delayed-retirement benefits, you would need to invest very aggressively, financial experts say. “Most retirees aren’t going to be 100% in stocks,” says Wade Pfau, founder of RetirementResearcher.com, a retirement-planning website.
In a 2023 paper for the Journal of Financial Planning, Pfau and Steve Parrish, scholar in residence at The American College of Financial Services, concluded that while retirees who delay claiming Social Security benefits may give up some upside potential if financial markets perform extremely well, that happens less frequently than many investment experts predict. And if the market turns bearish in the early years of retirement, retirees who are heavily invested in stocks could experience sequence-of-returns risk, which occurs when individuals are forced to take withdrawals from portfolios that have declined in value. This can inflict permanent damage, increasing the risk retirees will run out of money.
Reasons not to delay your time to claim Social Security
Insolvency concerns aren’t the only reason retirees claim Social Security benefits before age 70, says Michael DeMassa, a CFP with Forza Wealth Management in Sarasota, Florida. For some retirees, filing for benefits early enables them to postpone withdrawals from savings. Many retirees are reluctant to tap their savings, even if they have a significant nest egg. They “don’t like to see their assets drawn down, and that’s missed in academic studies,” DeMassa says.
Melissa Caro, a CFP and founder of My Retirement Network, a financial education platform, agrees. For many retirees, Social Security is valuable because it mimics a paycheck, providing significant comfort to those who don’t receive a pension, she says. If filing for benefits at age 67 instead of 70 means you’ll have $2,000 more a month to spend on travel and other pursuits, “why wait until 70?” she says. “The goal of retirement is to enjoy yourself.”
Treating age 70 as a default recommendation “ignores reality,” says Caro. “Some people need income earlier. Some don’t have the assets or health profile to wait comfortably. Others value certainty now over optimization later. There is no universally correct claiming age.”
An analysis by investment research firm Morningstar found that retirees who take withdrawals from their portfolios to delay filing for Social Security from age 67 to age 70 end up with a higher amount of lifetime spending income. At the same time, though, those retirees end up with a lower median balance in their portfolios when they die. While this strategy may work for retirees who want to get the most from their savings while they’re alive, it may not appeal to those who want to leave a legacy to their heirs.
Sandra Block is a contributing editor at Kiplinger Personal Finance magazine. For more on this and similar money topics, visit Kiplinger.com.
©2026 The Kiplinger Washington Editors, Inc. Distributed by Tribune Content Agency, LLC.
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