The Six-Figure Mistake

A guy I play cards with told me last fall he was claiming Social Security. He’d just turned 62. I asked him why he wasn’t waiting.

He said, “I want to get my money before they run out.”

I hear this every month. Smart guys. Good with money. Making one of the biggest financial choices of their lives based on a fear that isn’t true.

Social Security isn’t running out. But claiming it at the wrong time can cost you a fortune. Let me show you the math.

If you were born in 1960 or later, your full retirement age is 67. That’s the baseline. You have three choices:

▸ Claim at 62. You get checks sooner, but they’re permanently cut by about 30%. A $2,000 benefit at 67 becomes $1,400 at 62. Every month. For life.
▸ Claim at 67. You get 100% of your benefit. No penalty. No bonus.
▸ Wait until 70. Your benefit grows 8% per year for every year you delay past 67. That $2,000 becomes $2,480. A 77% difference between claiming at 62 and 70.

Same person. Same earnings history. The only difference is when they pick up the phone and call Social Security.

People who claim early always say the same thing: “But I get checks for eight extra years.” True. The early bird does get paid first.

But the math catches up. If you compare claiming at 62 versus 70, the break-even point is usually around age 80. Meaning: if you live past 80, delaying to 70 wins. Every year after that, the gap gets wider.

The average 62-year-old man today will live to about 84. The average woman, 87. That means most people who delay will come out ahead—by a lot.

Over a full retirement, the gap between claiming at 62 and waiting to 70 can easily reach six figures. On a $2,800 monthly benefit at 67—common for higher earners—the difference is over $170,000 if you live to 90. That’s not hypothetical. That’s arithmetic.

My card buddy thinks the fund is going broke. He’s not crazy—headlines say the trust fund could face shortfalls in the early-to-mid 2030s. That’s real.

But “shortfall” doesn’t mean zero. Even if Congress does nothing—which is unlikely, because cutting Social Security is political poison—payroll taxes would still fund about 79% of scheduled benefits. Not great. Not nothing.

And the fix is likely some combination of raising the taxable wage cap, adjusting the formula for higher earners, or nudging the retirement age. These are boring changes that won’t make headlines but will keep checks flowing.

Claiming early because you’re afraid of a 21% cut in the 2030s means locking in a 30% cut right now. That’s not strategy. That’s panic.

If you’re married, this gets more important. When one spouse dies, the survivor keeps the larger of the two benefits. Not both. The larger one.

If the higher earner claimed at 62 and took the 30% cut, that reduced check becomes the survivor’s income—possibly for decades.

For most married couples, the smartest move is simple: the higher earner delays to 70. The lower earner can claim earlier. That way, the surviving spouse is protected with the highest possible benefit no matter who dies first.

I’ve seen couples leave $100,000 or more on the table because they both claimed at 62 without thinking about the survivor.

I asked him one question: “Do you need this money right now to pay bills?”

He said no. He had a pension. He had savings. He just wanted to “get what’s his.”

I told him he was leaving six figures on the table because of a headline he read in 2024. He went quiet for a minute. Then he said, “Nobody ever showed me the math.”

That’s the problem. The math is simple. But nobody sits down and shows it to you. Your financial advisor should. If they haven’t, ask. If they can’t, find one who can.

You can also run the numbers yourself at ssa.gov. Log in, look at your estimated benefit at 62, 67, and 70. Do the subtraction. It’ll make the decision a lot clearer.

This isn’t about greed. It’s about not giving away money you already earned.

Show somebody the math.

— Walter