Kim
Millions of Americans are unknowingly leaving thousands in guaranteed retirement income on the table — and the culprit? Claiming Social Security too early.
Despite growing awareness around retirement planning, a 2025 AARP survey revealed that a significant portion of Americans lack critical knowledge about optimal claiming strategies, leading to long-term financial losses that can exceed $100,000.
With Social Security reforms looming and life expectancy increasing, understanding the right age to start receiving benefits is more important than ever. This article breaks down the mistake that’s costing retirees big time and how to avoid it.
The Common Mistake: Claiming Benefits Before Age 70
Many retirees choose to start claiming their Social Security retirement benefits as early as age 62, often due to fear about the program’s longevity or a simple lack of financial literacy. But what most don’t realize is that doing so locks in permanently lower monthly payments.
According to recent data:
- Only 19% of Americans know that age 70 is when monthly benefits reach their maximum.
- More than 66% of adults over age 50 did not know that delaying to age 70 significantly increases benefits.
- Millions are unknowingly accepting lower payments for life — a decision that could result in losing $50,000 to $100,000+ in total retirement income.
Understanding Full Retirement Age (FRA) and Delayed Retirement Credits
Your Full Retirement Age (FRA) is the age at which you’re entitled to full Social Security benefits. For individuals born in 1960 or later, the FRA is 67.
But here’s the catch: for every year you delay benefits past FRA up to age 70, you receive an 8% increase in your monthly payout. That’s called a Delayed Retirement Credit.
Monthly Benefit Comparison
| Age You Claim | % of FRA Benefit | Estimated Monthly Benefit | Lifetime Benefit (to Age 85) |
|---|---|---|---|
| 65 | ~86.7% | ~$1,560 | $374,400 |
| 67 (FRA) | 100% | ~$1,800 | $388,800 |
| 70 | 124% | ~$2,232 | $401,760 |
- Difference in total income (65 vs. 70): $27,360
- Difference including COLA and life beyond 85: Could exceed $100,000
These estimates are based on a life expectancy of 85 years and do not include annual Cost-of-Living Adjustments (COLA), which further compound the value of delayed claiming.
Why Claiming Early Hurts More Than You Think
Claiming Social Security early may seem like a smart move, especially if you’re worried about future program cuts. But in reality, you could be trading short-term income for long-term financial loss.
Here’s why delaying is smarter for most:
- Higher monthly payments for life
- Increased survivor benefits for a spouse or dependent
- COLA increases applied to a larger base amount
- Protection against outliving savings
A person who waits until 70 can receive over $600 more per month compared to someone who claims at 65 — that’s a 40% higher benefit every single month.
Why Americans Claim Too Early
The 2025 survey uncovered the reasons behind this costly mistake:
- Misinformation – Many believe benefits stop growing after age 67.
- Fear of insolvency – Concern about Social Security running out.
- Financial pressure – Need for immediate cash due to lack of savings.
- Lack of guidance – Few receive professional retirement advice.
How to Maximize Your Social Security Benefits
If you’re still approaching retirement age, here are actionable steps to avoid this six-figure mistake:
- Know your Full Retirement Age based on your birth year.
- Use the SSA Retirement Calculator to estimate benefits at different ages.
- Avoid claiming before age 67 unless absolutely necessary.
- Delay until age 70 if you are in good health and can afford to wait.
- Consult a financial advisor to align your Social Security strategy with other retirement income streams.
Claiming Social Security too early is a common but costly mistake — one that’s leading millions of Americans to lose out on $100,000 or more in guaranteed retirement income. With longer life expectancies and rising living costs, maximizing every dollar matters.
If you’re approaching retirement, take time to educate yourself, run the numbers, and make an informed choice about when to claim. Your future self — and possibly your spouse — will thank you.
FAQs
Is it always better to delay claiming Social Security until age 70?
Not necessarily. If you have health issues or a shorter life expectancy, claiming earlier may make sense. But for those in good health, delaying maximizes lifetime income.
Will Social Security really run out of money?
While Social Security trust funds are projected to be depleted around 2033, the program will still collect taxes and be able to pay about 75% of scheduled benefits. Delaying still pays off in most scenarios.
Can I change my mind after claiming early?
Yes — you can withdraw your application within 12 months of claiming and repay benefits received. Alternatively, you can suspend benefits at FRA to earn delayed retirement credits until 70.