When to Claim Social Security in Today’s Uncertain Climate

There’s one thing politicians from both sides of the aisle can agree on: nobody wants to be the person who cuts Social Security benefits. Talk about career suicide! It’s like announcing you hate puppies and sunshine.

But here comes Elon Musk, who apparently didn’t get the memo. He recently called entitlements “a big one to eliminate.” The White House quickly jumped in with the political equivalent of “What he MEANT to say was…” Classic damage control!

Meanwhile, the Social Security Fairness Act just repealed something called the Windfall Elimination Provision. Sounds fancy, right? Basically, some folks are getting bigger Social Security checks now. Good for them!

As someone who answers Social Security questions for a living, let me tell you – people are freaking out. They’re calling me like I’m personally in charge of signing their benefits checks. “Will I still get my money?” Yes, Karen, the government hasn’t gone completely off the rails… yet.

So should you wait until 70 to claim your Social Security benefits? Let’s dive into some scenarios that might help you decide whether to delay claiming or grab the money and run.

A Word of Warning (Or Just Common Sense)

This Social Security claiming decision is super personal. For this article, I’m assuming you’re not choosing between Social Security and eating cat food. You’ve got some retirement savings, you’re at least 62, and you’re wondering when to pull the trigger on claiming.

Most people think this is just about health: “Will I live long enough to make up for delaying?” But that’s like saying the only reason to buy a car is to get from point A to point B. What about the leather seats? The sunroof? The ability to blast your favorite tunes while stuck in traffic?

Similarly, your Social Security claiming decision should factor in legacy, taxes, work status, and marital status. We use fancy software for our clients to calculate eligibility, but you can find free versions online if you’re the DIY type.

Scenario One: You and Your Partner Both Wait Until 70

This is often the “optimal” scenario according to financial planning software for maximizing Social Security benefits. But let’s be real – the software isn’t factoring in that you might get hit by a bus tomorrow. It’s assuming you’ll both live past 80, which is the typical “break-even point.”

The Social Security Administration releases a Trustees Report every year. The latest one says the trust funds will be depleted by 2035. After that, they’ll only be able to pay 77% of benefits. It’s like a restaurant saying, “In 11 years, we’ll only serve three-quarters of your meal, but you’ll still pay full price!”

If this makes you nervous, consider having the spouse with the lower benefit claim early, while the higher-earning spouse waits until 70. It’s like hedging your bets at the casino.

Scenario Two: You’re Flying Solo

If you’re single, your Social Security decision is simpler. No need to worry about spousal benefits – it’s all about you, baby!

Consider these factors when deciding when to claim Social Security:

• Your current health status
• Family longevity history
• Financial needs
• Other retirement income sources

If your health is poor and you don’t expect to see your eighties, claim those benefits early. Why leave money on the table? On the flip side, if your grandparents all lived to 100 and you’re still running marathons at 65, waiting until 70 might be smart. Your Social Security benefit increases by 8% each year you delay after full retirement age. That’s better than most investment returns, without the stress of watching the stock market!

Scenario Three: You’re Still Working

If you’re still working and under full retirement age, claiming Social Security early is usually a bad move. There’s an earnings cap of $23,400 (for 2025), and they’ll reduce your benefit if you earn more. It’s like the government saying, “Congratulations on being productive – now we’re going to penalize you!”

When working while claiming Social Security before full retirement age:

• Be aware of the earnings cap
• Understand how benefits might be reduced
• Consider if delaying makes more financial sense
• Calculate the long-term impact on your benefits

Scenario Four: You Want to Leave a Big Fat Legacy

You can pass your investment accounts to your kids, but you can’t pass your Social Security benefits (unless they’re minors). So if leaving a sizeable inheritance is important to you, claiming early might make sense.

The math depends on investment returns and how long you live. The idea is that by claiming Social Security early, you can let your investments grow untouched. If you’re feeling adventurous, you can invest more aggressively. Just don’t blame me if your “aggressive” investments turn into “aggressive losses”!

Remember, there’s no perfect answer here. But at least now you won’t make a Social Security claiming decision that’s completely bonkers. And isn’t that all any of us can really hope for?