Most Americans Overlooking Key Social Security Advice That Could Cost Them Thousands
Published: 22 October 2025 | Updated: 22 October 2025
By: Tilly Armstrong, US Deputy Consumer Editor
Introduction
A recent survey reveals that the majority of Americans are set to overlook vital advice regarding Social Security, a decision that could lead to significant financial losses in retirement. Understanding the implications of when to claim Social Security benefits is crucial for securing a stable financial future.
The Current Landscape of Social Security Claims
According to a study conducted by investment firm Schroders, a mere 10% of working Americans intend to wait until the age of 70 to claim Social Security benefits. While benefits can be claimed starting at age 62, doing so results in a permanent reduction of monthly payments.
Full Retirement Age
To receive full benefits, individuals must wait until their full retirement age, which currently is 67. For those who defer their claims beyond this age, benefits increase by 8% for each year they wait. This strategy is widely recommended by financial experts, as those who claim at 70 can secure the highest monthly payments possible.
Financial Implications of Early Claims
Research from the National Bureau of Economic Research indicates that individuals claiming benefits before age 70 could waste an astonishing $182,000 over their retirement. Despite this, many Americans continue to choose early access to their funds.
Reasons for Early Claims
According to the findings by Schroders, 37% of survey respondents expressed a desire to access their benefits as soon as possible. This inclination reflects the financial pressure many feel due to heightened living costs and inflation. Additionally, 36% of individuals surveyed voiced concerns that Social Security may deplete its funds before they reach retirement age.
The Impending Shortfall in Social Security Funds
Forecasters have indicated that the Social Security retirement fund is expected to face a shortfall within the next seven years. This alarming prospect suggests that retirees could encounter substantial benefit cuts, possibly as high as 24% by the end of 2032. Such cuts could leave a working couple who retire in 2033 with approximately $18,100 less each year.
The Trust Fund’s Dynamics
Approximately 70 million Americans rely on Social Security for their monthly pension checks. Under federal law, once the trust fund becomes exhausted, benefits must be adjusted to match incoming revenues, resulting in reduced payments.
The Necessity for Strategic Planning
Of the respondents in the Schroders survey, 34% indicated they would not wait to claim benefits, needing the funds for regular income. Another 15% reported receiving advice to claim before turning 70. Deb Boyden, head of US defined contribution at Schroders, stresses the importance of Social Security benefits in sustaining a stable retirement for many.
The Savings Gap
With many Americans facing a significant savings gap, Boyden notes that delaying claims can positively impact retirement finances despite the urgency to access funds sooner.
What’s Next for Seniors?
As retirees anxiously await news about potential increases in their Social Security payments next year with the upcoming cost-of-living adjustment (COLA), the situation remains uncertain. The Labor Department’s announcement regarding this adjustment, based on the Consumer Price Index data for September, has been scheduled for October 24, 2025.
Conclusion
The choice to ignore crucial Social Security advice could cost thousands in potential benefits. As Americans navigate their retirement planning, understanding when to claim Social Security is essential for achieving long-term financial stability.
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