We Are Rethinking Our Social Security Claiming Strategy

September 18, 2025 – Anyone who has been following Topretirements for a while knows that we are a big proponent of delaying taking Social Security benefits as long as possible. But maybe is time to change that position.

Up to now the advantages of waiting to claim Social Security retirement benefits to age 70 have been pretty clear (for most people). For every year you wait to claim after age 66 you get an 8% increase in your benefits, up to age 70. Delaying has a second benefit because ir raises your COLA $ increase be every year. And, if your spouse’s benefit isn’t as high as yours, he or she will get your higher benefit for the rest of their life at your passing. If your finances are tight, all these advantages could be worth a lot. On the other hand, for people and couples who have a very short remaining life expectancy, or who need the money now to survive, it might not be a good idea to wait.

So what has changed?

We have been warned for years that the Social Security Trust Funds are going to be exhausted early in the next decade. The predicted year changes, but the latest forecast is for 2033, less than 8 years away. All kinds of experts have warned that unless something is done, only a little more than 70% of benefits will be available to be paid after that. Meanwhile, despite politicians of all stripes promising to protect Social Security, none of them have done anything about it.

Our first reason for thinking that maybe you might be better off claiming early is related to that problem – nobody is doing anything. Although there are fixes that could solve the problem (raise how much we pay into the system, tax all income, etc.), few politicians have had the courage to propose or vote for them. As 2033 gets nearer and nearer, the ability to fix the problem gets harder and harder.

Secondly, while Social Security benefits are still taxable over certain levels, the One BIg Beautiful Bill introduced a temporary deduction that allows eligible beneficiaries to lower their overall taxable income. The new, additional $6,000 deduction for individuals aged 65 and older means that fewer seniors will pay income taxes on their Social Security benefits. Since a portion of the tax revenue from Social Security benefits helps fund the program’s trust funds, this reduction means less money is flowing into the system, accelerating when the Trust Funds run out of money.

Thirdly, our rapidly increasing national debt, exacerbated by tax cuts for corporations and the ultra-wealthy, is not going to help. As the debt increases, so will the amount of interest paid to service it. Rates could go up too as the government’s need for cash expands. The final effect of our debt is that it reduces our ability/willingness to buy our way out of the problem and pay promised benefits. The shortfall is going to be enormous, probably more than any government will be willing to pay.

The bottom line

Millions of Social Security beneficiaries are probably going to see around a 30% reduction in their benefits in just a few years. The well off will be able to weather it, but many others will not. As of May 2025, the Social Security Administration (SSA) estimated that more than 40% of recipients aged 65 and older depend on these payments for at least half of their income. The human suffering is going to be immense.

Some rough calculations

Which brings us back to where we started. Maybe you are better off grabbing the money now instead of claiming later. You can do the math based on your own expected benefits (AI can help with the calculations), but here is one back of the envelope sample.

Expected benefit at age 66: $3000/month – $36,000 year

If you claimed at age 66 your benefit would amount to $36,000 now. A 30% reduction in 2033 would cut your annual benefit of $25,200, a $9,000 reduction. Prior to 2033, if you wait to age to age 70 to claim your benefits, the 8% increase per year means your $3,000 benefit would rise to $4081/month ($49,000/year), not bad. But if you only get 70% of that after 2033, your benefit would decline to $2,856/month, or about $30,000 year, less than you would have gotten if you claimed at age 66. That’s a pretty big difference.

Worth the wait?

If you took the $3,000 at age 66 you would have received 3,000 for a total of $144,000 over 4 years. By waiting to age 70 you would be forgoing that amount until then, and hoping to make it up by living a long time. The math seems hard to work.

Bottom line:

You can do your own calculations to see what works better for you. Or, you can bet that our politicians can either get their act together now and fix the problem, or bail us out with the general fund starting in 2033. As each day with no solutions coming forward, we are increasingly sceptical.

Comments? Let us know your thoughts in the Comments section below. Have you changed your mind?