Should You Take Social Security at 62 or Wait for a Larger Lifetime Benefit?

Clients often ask whether Social Security is going broke and whether they should claim their benefits early. These are fair questions, considering the frequent headlines predicting trouble for the system.

While we cannot predict the future, we can offer a few observations. It is logical that changes will eventually be made to restore long-term solvency. Potential solutions that policymakers discuss include gradually raising the retirement age, increasing the payroll tax cap on earnings, or some combination of reforms.

If you are skeptical about the future of Social Security, you may be tempted to claim your benefits early. Almost 25% of workers sign up at age 62. Some have very legitimate reasons for doing so, but what about you?

After decades of payroll taxes deducted from your paycheck, it is natural to want your “fair share.” Many people also hear projections that if no changes are made, the Social Security trust fund could face a shortfall around 2034–2035, at which point ongoing payroll taxes would still cover roughly 75% to 80% of scheduled benefits. Hearing this can make it tempting to log in and claim benefits right away.

However, it is important to remember that even under these projections, Social Security would not disappear. Payroll taxes would continue funding a large portion of benefits, and most policymakers expect some form of reform before cuts of that magnitude occur.

Drawbacks to Filing Early

If you claim Social Security before full retirement age and continue working, your benefits may be temporarily reduced under the earnings test. In 2026, benefits are reduced if you earn more than $23,400 before reaching full retirement age. However, these benefits are not permanently lost. Once you reach full retirement age, Social Security recalculates your benefit to give you credit for the months when benefits were withheld.

Second, even if you and your spouse are fully retired, claiming early locks in a permanent reduction in your benefit. One of the most reliable ways to increase your Social Security income is simply to wait to claim. If you delay from age 62 to 67, your monthly benefit increases by about 43%. Waiting until age 70 increases the monthly benefit by roughly 77% compared with claiming at 62.

Some people argue that it is better to claim early and invest the money. While that strategy can work in certain situations, it is harder than it first appears. To come out ahead, the investments must earn strong returns after taxes and inflation, and the portfolio must continue producing income for the rest of your life. By contrast, Social Security provides a government-backed, inflation-adjusted income stream that lasts as long as you live.

Another way to think about delaying Social Security is that you are effectively purchasing a larger lifetime pension from the government. Very few investments can guarantee income that increases with inflation and continues for life. By waiting to claim, you increase that guaranteed income for the rest of your retirement.

Another important consideration is the impact on a surviving spouse. When one spouse dies, the survivor generally keeps the larger of the two Social Security benefits. If the higher-earning spouse claims early and locks in a reduced benefit, that smaller amount may continue for the rest of the surviving spouse’s life. Delaying benefits—especially for the higher earner—can help ensure that the surviving spouse receives a larger, inflation-adjusted income stream for life.

When to Quit Working and When to Claim Social Security Are Two Separate Decisions

We are not suggesting that everyone should work until age 70. The decision about when to stop working is separate from the decision about when to claim Social Security.

In many cases, if it makes sense to delay claiming after full retirement age, we can help you create an income stream from IRAs or other investment accounts to bridge the gap. Coordinating these decisions carefully can often lead to significantly higher lifetime benefits.

These choices can be complicated, and the right answer is different for everyone. We are happy to help you think through the options and determine what strategy best fits your situation.