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In the days following his 67th birthday, Marty McGowan made a decision that deviated from his original retirement plan: he filed for Social Security benefits earlier than anticipated.
While his initial strategy was to wait until age 70 to claim benefits in exchange for a higher monthly payout of $800, the economic turbulence of recent years, coupled with concerns about potential policy changes, led him to file sooner.
Like many other retirees, McGowan feared that delays might jeopardize his future access to Social Security.
Rise in Social Security Claims: A Reflection of Economic Anxiety
McGowan’s decision to claim early mirrors a broader trend. According to the Urban Institute, 276,000 more retirees filed for Social Security benefits in the 2025 fiscal year compared to the same period in 2024, marking a 13% increase.
While there are multiple factors behind this surge, anxiety over the stability of Social Security during an uncertain economic climate played a significant role. Jack Smalligan, a senior policy fellow at the Urban Institute, emphasized that for most people, claiming early could lead to reduced lifetime benefits.
The Trump administration’s push for downsizing federal agencies, including Social Security, and the false claims about widespread fraud within the agency only added to the mounting concerns. These fears caused an influx of people seeking to access their benefits sooner rather than risk losing them entirely.
The Economic Uncertainty and Its Impact on Social Security Decisions
The unsettling atmosphere surrounding the Social Security Administration, coupled with fears of job cuts and potential benefit cuts, contributed to a wave of early claims.
The concern that reforms could affect retirees’ access to benefits prompted many to file early despite the financial drawbacks of doing so.
Leland Dudek, the acting commissioner of the Social Security Administration, acknowledged during an agency meeting that “fear mongering” had indeed accelerated early claims.
Comparison of Social Security Benefits by Filing Age
| Filing Age | Monthly Benefit Amount | Lifetime Benefit | Effect on Payout |
|---|---|---|---|
| Age 62 | Reduced | Lower overall | 30% reduction |
| Age 67 | Full | Standard | No reduction |
| Age 70 | Increased | Higher overall | 8% increase per year |
Long-Term Impact of Early Social Security Claims
Filing for Social Security at an earlier age may seem like an attractive option for some, especially during times of financial insecurity. However, it can result in lower lifetime benefits.
For example, someone who files at age 62 instead of 67 may face a 30% reduction in their monthly payout.
Additionally, every year a person delays filing after reaching full retirement age (67) can result in an 8% increase in their monthly benefits until they reach 70.
Experts recommend viewing Social Security benefits as a form of longevity insurance. If you expect to live a long life, delaying benefits may be a wise financial decision, particularly if you are concerned about outliving your retirement savings.
The delay can provide a better return than purchasing a private annuity, according to economists.
McGowan’s Story: Concerns About Policy Changes and Market Fluctuations
For McGowan, the decision to claim early wasn’t made lightly. After years of planning to wait until age 70, he and his wife, Lynn, began to question their strategy.
The unpredictability of President Trump’s policies and the economic turmoil they sparked, such as a significant drop in McGowan’s investments, prompted the couple to reconsider their original plan.
Although the markets eventually recovered, the experience solidified McGowan’s decision to file for benefits early to secure a financial safety net.
Surge in Claims: The Social Security Administration’s Response
This surge in early claims is expected to continue, with the Social Security Administration projecting nearly 4 million retirement claims for the 2025 fiscal year, up 15% from 2024. This sharp increase far surpasses the agency’s usual 3% annual growth rate.
As of April 2025, the Social Security Administration reported 614,158 pending claims for retirement, survivor, and health insurance benefits, up from 460,158 the previous year.
The surge in early Social Security claims highlights the impact of economic and political uncertainty on retirees’ financial decisions. While claiming early may provide immediate relief, it often comes with a long-term cost in terms of reduced benefits.
For those who can afford to wait, delaying Social Security can offer substantial rewards, especially as longevity increases and outliving savings becomes a concern.
Ultimately, retirees should consider their personal financial situation, life expectancy, and the broader economic landscape when making this important decision.
FAQs
What are the disadvantages of claiming Social Security early?
Claiming Social Security benefits early can result in a lower monthly payment. For those who file at 62 instead of 67, the monthly benefit is generally reduced by 30%. If you delay your claim until 70, your benefit increases by 8% each year.
Is it ever a good idea to claim Social Security early?
In certain situations, claiming early may be the best option, especially for individuals who need immediate income or those facing financial hardship. However, for most, delaying the claim until the full retirement age or beyond results in a larger lifetime benefit.
How has the recent political and economic climate affected Social Security claims?
Political and economic uncertainty has significantly influenced retirees’ decisions to claim Social Security benefits earlier. The fear of policy changes, job cuts at the Social Security Administration, and market fluctuations have led to an uptick in early claims as people seek to secure their benefits.