Misleading Headlines About Social Security Could Cost Retirees a Fortune

When the news came out last month that Social Security funds would run low sooner than expected, word spread like wildfire. Fears that the program will run out of money may lead some people to make a bad retirement decision, a new survey suggests.

Alarmist media coverage of Social Security's funding shortfalls — as seen in many headlines around the annual Trustees' report released last month — influences people to say they will claim benefits earlier, which would permanently lower the size of their monthly checks, according to a study released this week by the Center for Retirement Research at Boston College.

The study found the scarcity framing of some Social Security headlines made readers nervous, and they subsequently made poorer decisions about when to claim Social Security. When the Treasury Department announced the Social Security trust fund reserves would be depleted a year earlier due to the pandemic, officials made it clear that they’d still be able to pay out 76% of current benefits. Additionally, Congress could still act to replenish the fund before the shortfall begins in 2034, and many experts believe lawmakers will. Yet many headlines focused only on the trust funds' depletion, using frightening words like "insolvency."

More than 3,000 participants in the online survey, ranging in ages from 21 to 61, reacted to different sample headlines about Social Security funds being depleted. A group that read headlines referencing the trust fund afterwards said they would claim Social Security earlier. (Those who erroneously believe the program will go bankrupt want to get whatever they can as soon as possible.) Participants who saw a headline that instead focused on tax revenues continuing to support three-quarters of Social Security benefits still reacted by deciding to claim Social Security earlier, but less so than the group that read more alarming headlines.

So when should you actually claim Social Security benefits? It can be difficult to figure out the best time, given that the Social Security Administration, or SSA, discontinued the practice of sending out yearly letters with projected benefits to everyone under age 60. You can view your estimated benefits on the SSA’s website, but the projections aren’t exact, the agency says.

What's clear is that if you claim at your earliest eligibility of age 62, you’ll get roughly 75% of what you would have received had you waited several years for what the government calls your full retirement age, when you get 100% of what you’re eligible for.

If you were born between 1943 and 1954, your full retirement age – meaning the age when you’ll be paid out your full Social Security benefits – is 66. If you were born in 1960 or later, your full retirement age is 67. And if you were born somewhere in the middle of those dates – between 1955 and 1959 – your full retirement age is between ages 66 and 67. (This chart on the SSA website maps out how many months into age 66 those folks can claim their full benefits).

And if you wait until you’re 70 years old, you’ll get what’s called a delayed retirement credit, meaning your monthly checks will be even larger.

That’s already far from the age when most people decide to claim Social Security benefits. Around a third of workers claim their benefits at 62. The bottom line is that the longer you wait to claim, the heftier your monthly checks will be. So it’s in your best interest to wait as long as you comfortably can, knowing that Social Security won't run out of money before then.

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