Should You Take the Money and Run at 62? Social Security Could Be Cut 22% in 2032.

The word is getting out: If Congress doesn’t act, Social Security retirement benefits could be cut by about 22% in late 2032. That’s just six years away, and it has a lot of people spooked.

The result? More Americans approaching retirement are apparently thinking about claiming Social Security at the earliest possible age, 62. Their logic is understandable.

Take the Money and Run – is That Really the Smartest Strategy?

For years, Social Security experts have generally advised people who can afford to wait to delay claiming, sometimes all the way to age 70. Waiting produces a substantially larger monthly benefit for life. But with Social Security’s retirement trust fund projected to be depleted in 2032, even some retirees who understand the advantages of waiting are having second thoughts.

A Lack of Understanding

Shedden believes that most Americans don’t understand enough about how Social Security works to make an informed decision. They don’t appreciate that waiting to claim pays off. Delaying benefits from their Full Retirement Age (currently 67) to age 70 results in an 8% increase in benefits, per year. Annual COLAs would apply to the higher figure. And a surviving spouse gets that higher benefit if it is higher than their own.

Does Claiming at 62 Beat Waiting Until 70 if Benefits Are Cut 22%?

Consider someone turning 62 in 2026 whose full retirement age benefit would be $2,000 a month.

Claim at 62: About $1,400/month
Wait until 70: About $2,480/month

If Social Security benefits are cut 22% in 2032, the person who claimed early would see the $1,400 check fall to about $1,092. The person who waited until 70 would receive about $1,934 after the same cut.

The advantage of claiming at 62 is that you collect roughly six years of benefits before the projected cut—giving you a head start of about $125,000.

But after age 70, the person who waited receives about $842 more every month. In this simplified example, the early claimant stays ahead until roughly age 83.

Bottom Line

A 22% cut makes claiming early somewhat more attractive, but it doesn’t eliminate the financial advantage of waiting for people who live well into their 80s. And claiming at 62 does not protect you from a future benefit cut. Talk with your financial advisor before you make any decision – this one is important.