Amid messiness at the Social Security Administration, more people are taking benefits early

Almost every worker participates in Social Security, and almost every older adult receives benefits.

For 4 out of 10 retirees, Social Security payments provide at least 50% of their income, according to the Center on Budget and Policy Priorities.

For 1 in 7, it’s 90% of their income.

Last week, I learned about three people who filed for Social Security benefits at age 63, even though they had the resources to delay.

That’s significant because people boost their benefits by waiting to claim. The earliest you can file for benefits is age 62. But if you wait until age 70, the latest you can claim, benefits are about 76% higher.

Those people I know are far from alone in filing in their early 60s. The Urban Institute notes that during the first half of the fiscal year, Social Security received more early claims from higher earners, especially at age 62, compared with the previous year.

The long-term financial security of early claimers with the ability to wait could suffer from these decisions.

Yet the Social Security Administration is in turmoil, and doubts about the reliability of retirement benefits are understandably cropping up.

For one thing, service is deteriorating with call wait times up, long lines at field offices, and fewer workers on payroll to deal with beneficiaries, thanks to cuts initiated by the Department of Government Efficiency (DOGE).

For another, the latest report from the trustees of Social Security is sobering. Social Security trust funds will start running a cash-flow deficit in 2033 — eight years from now.

If Congress and the White House do nothing, scheduled benefits would be cut by about 23%.

Laurence Kotlikoff, economics professor at Boston University and president of the financial planning company Economic Security Planning, ran the numbers.

His conclusion: “If it paid to wait to collect benefits, assuming no benefit cuts, it will surely still pay to wait even if the politically impossible happens — benefits are cut by 23 percent starting in 2033,” he writes. “True, the gain from waiting won’t be as large, but it will likely still be substantial.”

The cutbacks at Social Security offices are disruptive at the least, and Washington simply must eliminate the risk of insolvency for a system that people pay for throughout their working lives.

So nervousness about depending on Social Security is understandable. Still, the simplest way to boost retirement income security remains to delay filing.