Financial Experts Warn Against Early Social Security Claims

Retirees are evaluating whether to claim Social Security benefits at the earliest age of 62 or delay until full retirement age or 70. Claiming at 62 results in a permanent monthly payment reduction of approximately 30%, while delaying until age 70 increases benefits by about 24%.

Financial expert Suze Orman warned against the social media trend of claiming benefits at 62, describing the decision to wait as insurance against longevity. Orman argues that delaying claims maximizes benefits and provides a financial gift to surviving spouses. While some experts suggest early claiming is practical for those with immediate income needs or lower life expectancy, Orman contends that early claims offer no protection against potential future benefit cuts.

These decisions occur as the Social Security retirement trust fund faces potential depletion around 2032, according to a Trustees Report. If Congress does not act, retirees could face an across-the-board benefit cut of approximately 22%. However, the relative advantage of delaying benefits would still apply even if such a percentage reduction is implemented.