90% of Americans Skip This Crucial Social Security Strategy — And It’s Costing Them a Fortune

Nearly every worker has heard the same piece of retirement wisdom: wait as long as you can before claiming Social Security, because the longer you wait, the bigger your monthly check. But new research shows that Americans overwhelmingly ignore this advice. According to Schroders’ 2025 U.S. Retirement Survey, 90% of workers plan to file before age 70, even though delaying until then unlocks the maximum possible benefit.

This gap between knowing the rule and following it has real financial consequences. Many retirees lose well over six figures in lifetime income simply because they feel they can’t afford to wait — or aren’t sure the program will be around.

This guide digs into why Americans claim early, what’s at stake, and how to make smarter decisions about Social Security in a time of economic uncertainty.

Why Most Americans Still Claim Social Security Too Early

Most people already understand the basic principle:
Early filing = smaller checks for life.
Delaying = bigger checks for life.

But understanding isn’t the problem — execution is.

Part of this comes from fear. Part comes from financial pressure. And part comes from decades of inconsistent messaging around Social Security’s long-term stability.

The Real-World Pressures Driving Early Filing

Many Americans simply cannot wait. In today’s economy, there’s a harsh set of financial realities:

• Limited retirement savings across all age groups
• Higher cost of living, from groceries to housing
• Rising medical bills and insurance premiums
• Job losses or health limitations as people enter their 60s

For millions, Social Security becomes the default “paycheck replacement,” not a supplement. Workers often leave the labor force earlier than expected — sometimes involuntarily — and claiming immediately becomes the only option.

Misconceptions About Social Security’s Solvency

Schroders found that nearly half of workers fear Social Security may “run out of money.” This is a major factor pushing people toward early claiming.

But this fear is based on misunderstanding. Social Security is not going bankrupt — it has structural funding challenges, but the program doesn’t vanish once the trust fund is depleted. Understanding the difference could help more Americans make better decisions.

The Impact of Claiming Early: How Much Money Is Really Left on the Table

Understanding Reductions at Age 62

You can claim as early as 62, but the price is steep.

• A typical worker claiming at 62 receives roughly 30% less than they would at full retirement age (FRA).
• FRA is currently 66 or 67, depending on birth year.
• That reduction is permanent — it does not adjust later.

For an average earner eligible for $2,000/mo at FRA, claiming at 62 yields around $1,400/mo instead.

Over a lifetime, that’s not a small haircut — it’s a major income loss.

How Delaying Until 70 Boosts Lifetime Income

For every year you wait past full retirement age, your benefit grows ~8% per year due to delayed retirement credits.

By age 70, someone with a $2,000 FRA benefit gets about $2,480 — a 24% increase.

This isn’t a high-risk investment. It’s not tied to the stock market. It’s not subject to credit risk. It’s essentially a government-guaranteed, inflation-adjusted return.

Financial advisors often call delaying benefits “the best annuity you can buy.”

The Hidden Lifetime Cost — Including the $180,000 Gap

Multiple studies show that claiming early can cost retirees more than $180,000 over their lifetime, especially for those who live into their 80s or beyond.

Most retirees underestimate their longevity, but actuarial tables consistently show:

• If you reach age 65, your odds of reaching 85 are strong.
• Women are especially likely to outlive the averages.

This makes delaying incredibly valuable for anyone with average or above-average life expectancy.

The Break-Even Age Explained in Plain English

Why the Math Points to Age 80

The break-even point compares:

1. The smaller, earlier payments you receive if you claim at 62
   vs.
2. The larger, later payments you receive if you claim at 70

Because you get eight more years of checks by claiming at 62, it takes time for the age-70 strategy to catch up — roughly 10 years.

So break-even typically comes around age 80.

When Early Claiming Makes Financial Sense

Despite all the advantages of waiting, early filing is sometimes the best move:

• Poor health or reduced life expectancy
• Involuntary job loss late in life
• Lack of savings to cover basic expenses
• Situations where spousal benefits or survivor benefits change the math

For example, someone with a chronic illness who may not live into their late 70s could be financially better off claiming early.

Why Life Expectancy Should Drive the Decision

The key mistake many people make is assuming they won’t live long enough to benefit from waiting.

But modern longevity data shows:

• Half of Americans underestimate how long they will live
• Many believe life expectancy stops at 75
• Yet millions live well into their 80s or 90s

This makes waiting until 70 a powerful hedge against outliving your savings.

The Bigger Problem: America’s Retirement Savings Crisis

$5,000 a Month vs. Reality — The Retirement Income Shortfall

Surveyed workers say they will need $5,000/month to retire comfortably.

But the average retiree receives:

• Around $1,780/mo from Social Security
• Very little from personal savings — the median balance for 55–64-year-olds is around $88,000

The math doesn’t add up, and retirees feel the squeeze.

Inflation and Healthcare Costs Intensify the Pressure

Even if someone wants to delay claiming, rising expenses work against them:

• Housing costs have surged
• Medicare doesn’t cover everything
• Prescription drug prices continue rising
• Inflation erodes purchasing power

For workers living paycheck to paycheck, waiting to claim feels impossible — even if it’s financially optimal.

Why Many Workers Don’t Believe They Can Afford to Wait

This is the heart of the issue:
Most Americans understand that waiting boosts their benefit, but they don’t feel they have the runway to delay.

That’s why strategic planning matters more than ever.

What’s Actually Going On With Social Security’s Future

The 2033 Trust Fund Depletion Projection

The Social Security trustees project that by 2033, the trust fund reserves may run dry.
If nothing is done, incoming payroll taxes would be enough to cover only about 77% of promised benefits.

This would trigger an estimated 23% cut.

But that’s the worst-case scenario assuming Congress does nothing.

Possible Fixes Congress Could Pass

Several well-supported policy solutions could shore up the program:

• Raising or eliminating the payroll tax cap ($176,100 in 2025)
• Gradually increasing taxes on high earners
• Raising full retirement age over time
• Adjusting benefit formulas for long-term solvency

Historically, every time the program has faced a shortfall, Congress has intervened.

Why Social Security Will Not “Disappear”

Even if the trust fund were depleted, the payroll taxes from workers would still support the majority of benefits.

Social Security is not going away.

But without policy adjustments, a reduction is possible.

This is important because many people claim early out of fear the program is collapsing — a costly misunderstanding.

Smarter Strategies to Maximize Lifetime Social Security Income

1. Bridging the “Gap Years” (62–70) With Other Income

If you want to delay benefits but need income, consider:

• Drawing from savings for a few years
• Using part-time or consulting work
• Drawing small amounts from a Roth IRA (tax-free)
• Temporarily reducing lifestyle expenses

Even bridging 12–24 months can substantially increase your benefit.

2. Coordinating Spousal Benefits

Married couples often miss opportunities:

• One spouse can claim early while the higher earner delays until 70
• Survivor benefits are based on the higher earner’s benefit
• Delaying the highest earner’s benefit protects the surviving spouse for life

This strategy alone can add hundreds of thousands in lifetime household income.

3. Working Longer or Part-Time to Delay Claiming

For every year you delay filing:

• Your Social Security benefit grows
• Your savings last longer
• You reduce the number of retirement years your savings must cover

Even part-time income can meaningfully delay drawing benefits.

4. Using Retirement Account Withdrawals Strategically

Many investors assume they should delay tapping their 401(k) or IRA as long as possible.

But in many cases, using those accounts earlier so you can wait until 70 yields:

• Higher total lifetime Social Security income
• Lower cumulative taxes (due to smaller required minimum distributions later)
• Greater financial flexibility in your 80s and 90s

This is especially powerful for retirees with moderate savings.