Why the way advisors talk about Social Security changes claiming plans

• Forward look: Even as the Claiming Age Clarity Act awaits enactment to establish “minimum,” “standard,” and “maximum” benefit labels, wealth managers will still need to clearly explain options to their clients.
• Expert quote: “A problem that advisors face is that the client already comes in with a preconceived idea that they’re going to claim at age whatever-that-is, and you got to either say, ‘Yes, that’s a good idea,’ or most of the time, ‘No, that’s probably too early. Have you thought about X, Y and Z?'” — Eric Ludwig, American College of Financial Services

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Advisors will likely still need to help clients understand the ramifications of various Social Security claiming ages despite legislation aimed at clarifying terminology.

H.R. 5284, called the Claiming Age Clarity Act, passed the Senate on Sept. 29 after passing the House in December 2025, and it is related to the findings of an Oct. 1 research paper about how advisors should talk to clients about when to claim their benefits.

This legislation, which awaits President Donald Trump’s signature, would change the Social Security Administration’s terminology from the “early eligibility age” of 62 to “minimum monthly benefit age.” The “full retirement age” and “normal retirement age” of 65 to 67 (depending on birth year) would change to “standard monthly benefit age.” Lastly, the SSA would be required to refer to the “maximum monthly benefit age” of 70 instead of referring to a “delayed retirement credit.”

But researchers at the American College of Financial Services found no difference in individuals’ choices based on terminology alone. Instead, they said advisors should find out what clients’ preconceived ideas are about Social Security and work from there to help them understand.

“A problem that advisors face is that the client already comes in with a preconceived idea that they’re going to claim at age whatever-that-is, and you got to either say, ‘Yes, that’s a good idea,’ or most of the time, ‘No, that’s probably too early. Have you thought about X, Y and Z?'” said Eric Ludwig, director of the Center for Retirement Income and an associate professor of retirement income at the American College of Financial Services.

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The researchers — Ludwig and his co-author, Loren Flood, director of curriculum and an assistant professor at the American College of Financial Services — found that claiming decisions were influenced by which boundaries clients already knew about.

The study, which was a survey-based experiment with 1,603 respondents younger than 60 years old, found that only 12.7% of respondents knew both the minimum and maximum ages of 62 and 70, while 64.1% knew neither age. The percentage that knew about age 62 — 14.5% — was larger than the percentage who knew about age 70, which was 8.7%.

If respondents only knew the earliest possible age to claim benefits, they would plan to claim 0.86 years earlier, whereas if they only knew about the latest age, they would intend to claim 0.62 years later.

“Advisors should identify the client’s existing anchors before building the recommendation,” Ludwig said in an email. “There also appears to be a basic misunderstanding that retirement age and Social Security claiming age have to be the same.”

Different methods of analysis

Although some might suspect retirees opt to claim Social Security earlier out of concern about the trust fund becoming depleted, the study found it wasn’t a statistically significant driver of claiming age, Ludwig said.

“That concern deserves to be acknowledged, then answered with facts, such as what the projected shortfall would and wouldn’t mean for their benefit,” Flood added. “When offered as education rather than correction, the client can weigh the evidence for themselves. It also builds trust in the client-advisor relationship.”

Showing clients dollar amounts rather than only percentages or ages is also helpful, said Flood.

The break-even age is another factor the researchers considered. Claiming benefits at an older age means receiving larger payments, but claiming benefits earlier means starting to receive payments sooner, even if those payments are smaller. There is a break-even point, often between ages 78 and 81. But the researchers discouraged advisors from focusing on that break-even analysis.

“The break-even-oriented messages did not produce later claiming intentions, while the age-based explanations did,” Ludwig said. “Break-even framing can also make Social Security feel more like an investment decision with risk-and-reward tradeoffs [rather] than a source of lifetime income protection.”

READ MORE: A contrarian Social Security strategy for the ultrawealthy

Claiming-age decisions are about more than math

In practice, it is rare for clients to know just one end of the claiming range, though perhaps they know about age 62 from other people in their lives, according to Samuel Diarbakerly, the founder and CEO of Boston-based wealth management firm Generation Capital Advisors.

He said it is more common for clients to lack understanding of how the benefit works, adding that even with all the education advisors bring, no one can account for all variables.

“We don’t know how long they’ll live, and we don’t know what tax rates will be in the future,” Diarbakerly told Financial Planning in a statement. “That’s why we don’t treat claiming as a bet on a break-even age. We treat it as a decision about protecting lifetime income under uncertainty.”

Social Security claiming decisions and advisors’ approaches to talking about them have as much or more to do with behavior and psychology than they have to do with calculating when might be the optimal time to claim benefits based on financial circumstances and life expectancy probabilities.

“It’s of critical importance … how advisors present that information, in a manner that’s more relatable from a behavioral-finance side than just bringing the math,” said Robert J. Patterson, CEO of San Diego-based RIA  RJ Patterson Group.

For instance, younger individuals tend to think differently about when to claim Social Security than older individuals who are closer to actually claiming, Patterson said.

“It’s very dependent on the individual’s current mental state, situation [and] cash-flow needs,” he said.

Introductory bullet points created by AI with editorial review.