Here’s the major reason Americans are suddenly claiming Social Security early. Smart move or waste of hundreds of thousands of dollars?

Conventional wisdom suggests it’s better for retirees to wait until full retirement age before claiming their Social Security benefits, but older Americans don’t seem to favor this strategy in 2025.

As AARP reports, the Urban Institute’s analysis of Social Security Administration (SSA) data shows more people are claiming their benefits early in 2025 (1). Between January and July, more than 2.3 million older Americans filed for their benefits, an increase of 16% from the same period last year.

Must Read

This is a reversal of a decades-long trend of Americans delaying their benefits until full retirement age, Jack Smalligan, senior policy fellow at the Urban Institute, told AARP. Even high-income retirees who can presumably afford to delay their benefits are now more likely to claim them at 62, the earliest age of eligibility.

To understand this sudden rush to cash in early, AARP conducted a survey of 1,884 adults aged 50-plus in June 2025 (2). The results showed that 49% of respondents who claimed their benefits earlier than planned were motivated by concerns that the Social Security system is “running out of money.”

Social Security’s uncertain future

Unfortunately, older Americans who are worried about Social Security’s funding have some cause for concern.

According to a forecast from the Committee for a Responsible Federal Budget, the Social Security trust fund could be depleted by late 2032, which would trigger a projected 24% cut in benefits (3).

However, this isn’t the only concern for older Americans rushing to claim their benefits, as around 20% of AARP’s survey respondents also pointed to concerns about the SSA’s planned cuts to its workforce and in-person services.

Earlier this year, the Trump administration announced a 13% reduction in the SSA’s workforce, the largest in the department’s history (4). These staffing cuts — coupled with a growing number of Social Security beneficiaries — could reduce the speed and quality of the SSA’s customer service, according to the Center on Budget and Policy Priorities (CBPP).

While concerns about the SSA’s funding and staffing may be justified, a hasty decision to claim benefits early could end up costing an older American more money in the long run. To understand why, it’s important to consider all the variables involved.

Read More: Vanguard reveals what could be coming for U.S. stocks, and it’s raising alarm bells for retirees. Here’s why and how to protect yourself

The big picture

Claiming benefits early just because of funding and staffing concerns with the SSA may be a short-sighted strategy.

For more than three decades, the Social Security trust fund has collected more in payroll taxes than the amount of benefits paid out, according to the CBPP. This surplus cash is deposited into interest-bearing Treasury securities, which have allowed the SSA’s trust fund to reach $2.9 trillion in reserves (5).

If the Social Security trust fund were to be depleted, benefit payments would still be paid out from the payroll taxes collected. In this case, benefits may need to be adjusted, but that all depends on how much tax revenue is collected at the time.

It’s also worth noting that trust fund depletion and benefit cuts are not unavoidable. Lawmakers could take several steps to reform the Social Security system, including raising taxes or the retirement age, to keep the program solvent and avoid benefit cuts (6). And since the trust fund is projected to be insolvent by 2032, there’s still plenty of time to do so.

Meanwhile, if you claim your benefits early, you permanently reduce your lifetime payouts from the Social Security system. In fact, your monthly benefits could be reduced by as much as 30% if you claim your benefits at age 62 (7).

If you have concerns about your health, longevity or opportunity costs, claiming benefits early may be the right choice for you, but basing this decision solely on forecasts about the SSA’s trust fund may not be the best idea. You can’t do anything about Social Security’s trust fund trajectory or the agency’s potential staffing shortages, but you can decide when to begin collecting benefits, and that decision is one of the most powerful financial levers that retirees can pull.

Delaying your claim will boost your monthly benefit checks by roughly 8% per year after reaching full retirement age, up to age 70. If this interests you, a financial adviser can help you with evaluating your personal breakeven point, health profile and income needs to figure out when you should claim your benefits.

What To Read Next

Join 200,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.

Article sources

We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.

AARP (1, 2); Committee for a Responsible Federal Budget (3, 6); Center on Budget and Policy Priorities (4, 5); Social Security Administration (7)

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.