When Purchasers Declare Social Safety Early, Take These Steps to Keep away from Surprises


What You Must Know

  • Welcome to Connecting the Dots, the column the place Marcia Mantell discusses real-life selections round Social Safety claiming and retirement.
  • Whereas the share of retirees claiming their advantages early has fallen in latest many years, it has ticked up for the reason that pandemic.
  • Claiming Social Safety earlier than 65 mechanically triggers different advantages; failure to take needed steps might result in tax penalties.

Most monetary advisors advocate that purchasers wait to declare Social Safety retirement advantages till full retirement age or as much as age 70. That’s sound recommendation. However for the reason that COVID-19 pandemic, extra child boomers are electing to begin advantages earlier

When claiming earlier than age 65, they inadvertently activate different advantages and might miss taking particular actions with Medicare and well being financial savings accounts. Errors result in pointless surprises and tax points.

A Have a look at the Information

The Social Safety Administration’s OASDI Advantages Awarded: Retired Staff tables report when women and men began claiming advantages. A just lately launched desk exhibits claiming ages between 1998 and 2022, a interval during which claiming patterns have modified considerably. 

Just a few examples:

  • In 1958, 58% of males claimed at 62. In 2022, solely 28% claimed that early.
  • In 1958, 62% of girls claimed at 62. In 2022, fewer than 30% did so.
  • Between 1998 and 2007, 79% of males claimed advantages earlier than their FRA (65 to 65 and 10 months). 
  • In the identical sequence, 82% of girls claimed earlier than their FRA.

The primary boomers reached age 62 in 2008, simply because the Nice Recession was gripping the US. 

  • In 2008, 82% of males claimed between 62 and FRA versus 60% in 2022.
  • In 2008, practically 85% of girls claimed between 62 and FRA versus 62.5% in 2022.

Total, child boomers have made exceptional changes towards ready to assert.

COVID-19 Hinting at a New Pattern

As youthful boomers approached retirement, they acquired higher recommendation from their monetary advisors concerning the worth of ready. Social Safety additionally stopped advocating for early claiming.

Nevertheless, the pandemic nonetheless impacts older employees in vital methods. And we see the claiming pattern turning — extra boomers are as soon as once more claiming sooner than is right.

Table showing change in share of men and women claiming Social Security before full retirement age, 2018-2022

Time will inform if this uptick is remoted to COVID considerations. 

Surprises When Claiming Earlier than 65

Purchasers who declare between 62 and 64 and eight months obtain a Welcome to Medicare packet about three months earlier than the month they flip 65. Additionally they mechanically enrolled themselves in Medicare Components A and B once they claimed Social Safety. 


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