Social Security Reforms could be targeted at high-income individuals first
As Social Security spends $1.5 trillion per year, demographic shifts threaten program survival.
Money tells the news
Some older Americans looking at potential social security benefits cuts are trying to access the program as soon as possible.
Experts say that might be a mistake.
Instead, potential beneficiaries should consider their health and life expectancy, what they can draw from, if they were working for good, and what their marriage status situation is, their financial advisors tOld USA TODAY. Balancing these factors with the amount needed each month will help retirees maximize their profits over the course of their lives.
Creating all the dollar counts is especially important when three in five American workers say their retirement savings are where they are supposed to be, according to Bankrate’s 2025 Retirement Savings Survey. More than a third of American workers are expected to need more than $1 million to retire comfortably. However, the survey said only half of workers think they are likely to achieve their retirement savings goals.
“There are mixed opinions about social security claims by age,” Managing Director Mike Lynch applied insights to the Hartford Fund. “It’s firmly and individually based.”
Is it better to get Social Security at 62, 67, or 70?
Age 62 is the earliest person who can assert social security, while age 67 is considered the total retirement age (FRA) for people born after 1960. However, if you are charged at age 62 instead of age 67, the monthly check will be about 30% smaller.
Additionally, monthly benefits increase by 8% each year after age 67 until the age of 70.
In the face of that, it appears that people should wait until at least 67 to receive the biggest checks possible, but that’s not necessarily true, experts said.
“Life expectancy makes a huge difference,” said Jaime Eckels, Plante Moran’s wealth management partner. “The longer you wait, the longer you have to live to collect. It makes sense to start by looking at Breakeven Age.”
Breakeven Age is when the monthly payment increase from a late benefit is equivalent to the total payment received through a previous claim. You can create a profile on the Social Security Administration website and use its break-even calculator.
Usually, delaying profits means that if you live above break-even, you will have a higher total lifetime payment, but if you don’t live past that milestone, you will argue that you will have a more economic advantage early on.
The Breakeven Age is just a guideline, the advisor said. They warned, they warned.
How can you determine when you should get Social Security?
Older Americans should consider the following, said John Sey, financial advisor at Bogart Wealth:
- Source of income: Apart from Social Security, what other retirement funds can I tap to pay? What are the impact of each tax?
- Health status: According to 2023 data from the Centers for Disease Control, the average life expectancy at birth is 78.4 years. The reality is that many people live long and may retire for more than 20 years if they practice healthy lifestyle habits. Financial Advisors are calculated separately by calling this lifespan or longevity and providing some general health and family history information.
For example, if you are single, healthy and come from a long-lived family, consider taking Social Security before. “Even if you give credit for the delay, if you start early, you’ll be collecting it over the years,” she said. “That’s what you’re gathering and reduce what you’re drawing from your own retirement fund.”
- Have a spouseMarriage requires strategy. for example, if Both people are eligible, but one earns more, so they first collect a small amount to earn cash. Grow others as long as possible and maximize profits. If the lower amount of spouses are in the range of higher earners, the surviving spouses receive a higher profit.
If a spouse collects and is married at least the same age as a year, but one spouse benefits are less than half of the other spouse, the spouse must instead assert the interests of the spouse. A spouse can claim up to 50% of the profits of a high worker.
- work: Beware of work penalties if collected before FRA. Earn over the annual limit ($23,400 in 2025) will reduce your benefits by $1 for every two dollars you earn above the threshold. In the year you reach the FRA, you will be deducted for every $3 you earn ($62,160 in 2025) in the months before the FRA. Once you reach the FRA, the deduction will end.
- Medicare: Social Security Eligibility begins in 1962, while Medicare begins at age 65. This is a three-year gap in which retirees must withdraw a much larger percentage of their portfolio, and is subject to greater risk if the market drops significantly. Tapping on your portfolio means selling more investments and raising a certain amount of cash. This will save faster and reduce the amount of assets that will generate revenue when the market recovers.
Why do so many retirees submit social security before?
Still, more retirees are submitting as soon as possible.
In 2023, the most popular age to claim is 66, accounting for 34.1% of new claimants, Social Security data shows. The next most popular age was 62, at 23.2%, and the 65 year old finished in the top three with 11.3%. All other ages were single digits, SSA said.
Here are some early claims:
- You need the immediate income you need, especially to pay off your debt or when you face an economic emergency.
- Health issues
- The desire to quit work
- If a spouse needs to stop working, to maximize the family’s profits
- Fearing that the program would run out of money, Eckels said it probably wouldn’t happen. “There are people who are always working in the system and paying,” she said. “There’s a lot you can do to fix the system.”
Governments can increase revenue by increasing payroll taxes that fund social security or income thresholds, continuing to pay taxes or increasing retirement age.
“The decision to rash for fear leads to bad outcomes,” she said.
Medora Lee is a money, market and personal finance reporter for USA Today. You can contact her at mjlee@usatoday.com and subscribe to our free daily money newsletter for personal finance tips and business news every Monday to Friday morning.
