When should you start collecting Social Security?
A new survey suggests many Americans plan to claim benefits early, even if it means receiving a smaller monthly check.
More than a quarter of beneficiaries begin collecting Social Security at age 62, the earliest age allowed. However, claiming benefits early can reduce monthly payments by as much as 30%.
The decision comes as questions continue about the future of Social Security. According to a recent report, the program may not be able to pay full scheduled benefits by the early 2030s. Unless Congress takes action, the report warns Social Security would be able to pay only about 78% of currently scheduled benefits.
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“This has certainly been a dereliction of responsibility on lawmakers’ part,” said Charles Blahous, senior research strategist at the Mercatus Center at George Mason University. “This could have been dealt with very easily and painlessly a couple of decades ago simply by making a slight adjustment to the rate of growth of the benefit formula. Probably no one would have noticed the change, and the problem would have disappeared. But they have dithered and delayed and procrastinated for so long that now we have a massive problem, and it’s going to be very difficult to solve without someone’s ox being gored in a pretty obvious way.”
For most people, delaying benefits beyond full retirement age increases monthly payments by about 8% per year until age 70.
Experts say there is no one-size-fits-all answer when it comes to claiming Social Security, and personal financial needs often play the biggest role in the decision.