‘If we wait, will it even be there?’ What I’m hearing from retirees about Social Security
My clients are afraid Social Security won't be there. My advice: Don't let that fear talk you into a smaller check.
A couple in their mid-sixties discussed their concerns about Social Security's future with a financial advisor. Julie had consulted a Social Security claiming analysis, and upon hearing the advisor, she expressed worry about the system's potential collapse. The advisor advised against early claiming due to fear of Social Security's disappearance and emphasized that headlines are not a strategy.
Many of the advisor's clients, including affluent retirees, share Julie's anxiety about Social Security's future. Some are opting for early claiming, not because it's mathematically optimal, but out of fear of waiting. The advisor challenged this approach, explaining that starting claims at 62 would result in a 30% reduction in monthly benefits, while waiting until 70 would yield a 124% benefit at full retirement age.
The advisor stressed that early claiming does not protect future benefits and that Congress has previously addressed financing issues by adjusting benefit rules and raising the full retirement age. The advisor urged clients to consider their specific circumstances and longevity estimates when making decisions about filing for Social Security, rather than letting fear dictate their actions.
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