Americans Ignoring Key Social Security Advice

A recent survey by investment firm Schroders reveals that 90% of working Americans intend to overlook the common advice of waiting until age 70 to claim Social Security benefits, which would typically lead to higher monthly payments.

Employees can start claiming benefits at 62, well before the current full retirement age of 67. The catch? Claiming early means a reduction of about 30% in monthly payments, a decrease that is permanent. In contrast, waiting until 70 can increase those monthly payments by over 30%, with the same amount being fixed for as long as benefits are received. Consequently, financial experts often recommend delaying claims, and studies indicate that those who apply early are less likely to do so again later.

Schroders’ 2025 U.S. Retirement Survey, which involved 1,500 adults, indicates that many working Americans are not heeding this advice. While the majority understand the trade-offs linked to early claims, only 10% plan to wait until 70, and 44% expect to claim benefits before reaching full retirement age.

“It’s not an oversight.”

Deb Boyden, head of U.S. defined contribution at Schroders, commented to CBS News that this trend highlights the economic realities many workers face.

“For a lot of Americans, deciding to forgo extra Social Security income isn’t an oversight,” she mentioned. “Our data shows that 70% of people know that waiting to claim Social Security means higher payments, yet few choose to delay their claims.”

Many retirees struggle with insufficient savings for retirement, contributing to rising economic disparity among Americans. Boyden noted, “Workers often rely on the income from Social Security to cover immediate expenses post-retirement.”

Another reason for early claims is the growing anxiety about the future of Social Security. Boyden pointed out that many Americans fear they might not receive their benefits later on.

The Social Security program indeed faces financial challenges as the aging U.S. population means payments are exceeding contributions. According to the Social Security Board’s recent calculations, the trust fund could be bankrupt by 2034 if no adjustments are made.

However, some misunderstandings persist. Many believe that if the trust fund becomes insolvent, Social Security payments would entirely stop. That’s not quite accurate; while payments would continue, benefits could be slashed by about 20%, a significant hit for over 70 million beneficiaries.

Experts suggest there are strategies lawmakers might consider to bolster the program, such as increasing the $176,100 income cap for Social Security taxes, as any earnings above that limit are exempt from these taxes.

In the meantime, non-retired Americans expressed in Schroders’ survey that they believe a comfortable retirement requires a monthly income of $5,032. Yet, Boyden highlighted that current retirees average about $3,250 monthly in retirement income, indicating a clear need for improved retirement planning.

Further analysis from Goldman Sachs shows that 75% of young working Americans are finding it increasingly tough to save for retirement, as basic living costs like housing consume a larger share of their income compared to previous generations.