A recent study reveals that the vast majority of working Americans plan to claim Social Security benefits earlier than financial experts recommend, highlighting the challenging financial realities many face as they approach retirement. According to Schroders’ 2025 U.S. Retirement Survey, about nine in ten workers intend to ignore the common advice of waiting until age 70 to claim Social Security benefits, despite the substantial financial advantages of delaying benefits until that age.
Social Security benefits can be claimed starting at age 62, which is well before the current full retirement age of 67. However, claiming benefits early comes with significant tradeoffs. Specifically, taking benefits before full retirement age reduces monthly payments by roughly 30%, and these reduced payments are locked in for life. Conversely, delaying benefits until age 70 results in a permanent boost of more than 30% in monthly payments. This strategy is often advocated by financial advisors because it can lead to significantly greater lifetime income. One study found that claiming benefits early could cost retirees as much as $182,000 in forgone payments over time.
Despite this, Schroders’ survey of 1,500 adults found that only 10% of respondents planned to wait until age 70 to claim benefits. Meanwhile, 44% said they would claim benefits before reaching full retirement age. Most participants acknowledged that they understood the financial tradeoffs involved, but their plans suggest other factors are heavily influencing their decision-making.
Deb Boyden, head of U.S. defined contribution at Schroders, explained that this disconnect is not due to a lack of awareness. “The decision to sacrifice extra Social Security income is not an oversight for most Americans,” she said. According to the survey, 70% of respondents knew that waiting longer leads to higher payments, but most still preferred to claim benefits early. This points to underlying financial pressures that compel many workers to prioritize immediate income over long-term gains.
One major reason for early claiming is the widespread shortfall in personal retirement savings. Many Americans are living paycheck to paycheck, with insufficient savings to sustain them through retirement. Given this reality, workers often feel they must rely on Social Security income as soon as possible to cover living expenses once they stop working. Boyden noted, “Many workers need the income generated by Social Security to meet their expenses immediately upon retiring.” This financial necessity outweighs the potential benefits of waiting for higher monthly payments later.
Another factor driving early claims is concern about the future solvency of the Social Security program itself. Worries that benefits could be reduced or eliminated cause some workers to claim benefits early “because they fear the money may not be there if they wait,” Boyden said. These concerns are not unfounded. Social Security faces a significant financial challenge due to demographic shifts such as an aging population and a relatively smaller workforce contributing payroll taxes. Currently, the program’s outlays exceed its income, and the Social Security Board of Trustees projects that its trust funds will become insolvent by 2034 if no changes are made.
However, the common belief that insolvency means Social Security will stop payments altogether is inaccurate. Even if the trust funds run out, Social Security will continue paying benefits, though at a reduced rate—estimated to be about 20% less than current levels. For the program’s more than 70 million beneficiaries, this reduction would represent a significant financial hit, but it would not mean a complete loss of benefits.
Experts and policymakers have proposed several potential solutions to shore up Social Security’s finances. One such proposal is to raise or eliminate the income cap on Social Security payroll taxes, which currently exempts earnings above $176,100 from taxation. Increasing this cap could generate additional revenue to help sustain the program and avoid or delay insolvency.
Meanwhile, the Schroders survey highlights a stark gap between workers’ retirement income expectations and reality. Non-retired Americans reported that they believe they need about $5,032 in monthly income to retire comfortably. However, today’s retirees generate an average of only about $3,250 per month from retirement income sources. This substantial shortfall underscores the need for better retirement planning and savings strategies to help workers prepare financially for retirement.
Adding to the challenge, a recent analysis by Goldman Sachs found that three-quarters of younger working Americans struggle to save for retirement. Basic living expenses such as housing consume a growing share of their income compared to previous generations, making it harder to put money aside for the future. This financial squeeze contributes to the urgency many feel to claim Social Security benefits