Why Fear of Social Security Running Out Shouldn't Drive Early Benefits Claim
Don't claim Social Security early for the wrong reasons
Making decisions related to Social Security because of a fear you won't get any benefits at all is a short-sighted choice that could cost you thousands of dollars. There are a few reasons for that.
1. Social Security's Financial Stability:
Social Security is not in danger of running out of money. It has a steady revenue stream from current workers' payroll taxes, which is unlikely to change drastically.
2. Benefits Assurance:
If the trust fund depletes by 2033, tax revenue is still projected to cover around 77% of promised benefits, ensuring some income for retirees.
3. Future Changes:
Lawmakers are likely to take action to protect Social Security benefits, potentially through gradual modifications that won't severely impact current or near-retirement individuals.
Claiming Social Security early guarantees a smaller monthly check
Opting for an early claim leads to reduced monthly benefits due to early filing penalties and missed delayed retirement credits. While waiting may mean a delay in income, it often results in higher lifetime earnings from Social Security.
Therefore, taking premature benefit claims out of unwarranted fear is advised against, as well-informed decisions based on personal circumstances are critical.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.