Despite the significant financial benefits of delaying Social Security, a new study from investment firm Schroders reveals that 90% of working Americans plan to claim their benefits before the maximum age of 70.
While financial experts often advise waiting to file, as it can result in a monthly payment roughly 24% higher than claiming at the full retirement age of 67, the survey of 1,500 adults shows a different reality. Only 10% of respondents plan to wait until age 70, while 44% expect to file even before reaching their full retirement age.
Claiming benefits at the earliest possible age of 62 comes with a substantial trade-off: a permanent reduction in monthly payments of about 30%. One analysis found that filing early can cost an individual over $182,000 in potential lifetime income.
Deb Boyden, head of U.S. defined contribution at Schroders, stated that this decision is not an oversight. “According to our research, 70% of Americans are aware that waiting longer to claim Social Security leads to higher payments, and yet so few are willing to hold off,” she said.
The primary reason is financial necessity. With a documented shortfall in personal retirement savings, many workers “need the income generated by Social Security to meet their expenses immediately upon retiring,” Boyden noted.
This trend is compounded by a widespread lack of knowledge about the program. A separate study by the Allianz Center for the Future of Retirement found that a majority of Americans admit they don’t know much about Social Security. About one in five mistakenly believe it will provide all the retirement income they need, even though it typically replaces only about 40% of a worker’s pre-retirement wages.
Beyond immediate need, personal circumstances also influence the decision. Individuals with health issues or those expecting a shorter-than-average lifespan may opt to claim early. Others calculate the “break-even point”—the age at which the total benefits received from delaying finally surpass the total received from an early claim. For someone who forgoes eight years of payments by waiting until 70, this break-even point is often after age 80. Considering current life expectancies—about 83.6 for a 62-year-old man and 86.5 for a woman—some decide the immediate cash is worth the risk.
Concerns over the program’s long-term stability also drive early claims. With Social Security’s trust funds projected to become insolvent by 2034, many fear “the money may not be there if they wait,” said Boyden. However, insolvency would not halt payments. If Congress fails to act, benefits would be reduced by about 20%, not eliminated entirely.
This gap between financial advice and public behavior highlights a broader retirement crisis. The Schroders survey found that non-retirees believe they need $5,032 in monthly income for a comfortable retirement, while current retirees average only $3,250. This disconnect underscores the growing difficulty many face in saving adequately for their later years.
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