MarketWatch5%
I will claim Social Security early. Why do so few people talk about the elephant in the room? 10%
By Quentin Fottrell11%
7/21/2026, 3:30:00 AM
BS Summary: This article contains 23 faulty reasoning types, including Appeal to Authority, Availability Heuristic, and Framing Effect, with Negativity Bias as the most egregious example at 7.7% saturation with 116 hits. Analysis detected 954 faulty-reasoning hits from 1,507 analyzed words, generating a BS Score of 27.3% and a BS Rank of 10% (17,799 of 19,672 articles). This article is better (less manipulative) than 90.50% of the article peer group.
By Quentin Fottrell
'The strongest argument for claiming benefits earlier goes beyond the traditional break-even analyses'
"Social Security is essentially longevity insurance."
(Photo subject is a model.)
Dear Quentin,
I read your response to the letter about the man who passed away after receiving only one Social Security check ("'It's heartbreaking': My brother claimed Social Security at 70.
He died from cancer after one payment.
Why wait to claim?").
I'm not waiting, and here's why.
Social Security is essentially longevity insurance.
The longer you wait to claim benefits, the larger your monthly payment becomes for the rest of your life.
That higher benefit is intended to provide greater guaranteed lifetime income.
Deciding when to claim is, therefore, a personal choice based on how much longevity risk you're willing to take and what level of lifetime income best fits your circumstances.
That said, the real issue today is the uncertainty surrounding Social Security's future.
Until that uncertainty is resolved, the possibility of future benefit changes should be part of the decision about when to claim.
Estimating that risk with any confidence is extremely difficult.
In my view, the strongest argument for claiming benefits earlier goes beyond the traditional break-even analyses and your own longevity predictions.
The thinking is simple: Collect the benefits you're entitled to now rather than assume they'll remain unchanged decades into the future.
For example, two proposals that have received public attention are an American Enterprise Institute proposal to cap Social Security benefits at about $2,050 per month, and a Cato Institute proposal for a universal benefit of roughly $1,800 per month.
While these are only proposals - not current law - they would reduce benefits primarily for higher-benefit recipients while leaving lower-benefit recipients largely unaffected.
Discussions about the "best" age to claim Social Security often focus on life expectancy, break-even ages and investment returns.
Those are all important considerations.
But they frequently overlook the elephant in the room: the political and financial uncertainty surrounding the future of the Social Security system itself.
Social Security Soothsayer
Related: 'I claimed Social Security at 62': At 76, I'm working at Walmart.
Why do I still owe payroll taxes?
You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com.
The Moneyist regrets he cannot reply to questions individually.
Everyone has a different jar of beans with which to make their calculations.
Dear Soothsayer,
You're not wrong.
But that doesn't make you right, either.
Therein lies the conundrum about when to claim Social Security.
If you truly believe that benefits will be reduced due to a shortfall of funds, and you have the choice to start claiming now instead of in six or eight years' time, go for it.
That's your calculated bet.
And as I explained in my answer to that letter, it is a calculation.
That reader's brother waited until he was 70, and life had other plans.
This man, meanwhile, is contemplating waiting so that his wife will get a higher amount through survivor benefits in the event he dies before she does.
Generally, I don't believe it's a good idea to make a decision out of fear - fear that Congress won't act and benefits will be reduced by an estimated 24% as soon as 2032, in this case - but one person's fear is another person's fervent belief, so who am I to judge?
We will all make the decision about when to claim, if we are fortunate enough to live that long - and there are no guarantees of that either - when the time comes.
Make your decision, and stick to it or change your mind (both are fine), but try not to sweat it in the meantime.
Everyone has a different jar of jelly beans with which to make their calculations.
Fear that Social Security benefits might be reduced is not, by itself, an empirical reason to claim benefits early, although it is certainly a valid theory.
Claiming early permanently lowers your monthly benefit by up to 30%, while every year you wait between 67 and 70 nets you another 8%.
No one - not you and not I - knows how lawmakers may address any funding shortfall.
Best to decide based on your own health, financial needs and retirement plans.
Means testing
As you say, there are many reports and opinions out there.
Mark J.
Warshawsky, a senior fellow and the chair of healthcare and retirement policy at the American Enterprise Institute, a center-right think tank in Washington, D.C., wrote this paper examining possible responses should the Social Security Trust Fund be exhausted over the next six years or so without a solution from Congress.
Rather than applying uniform benefit cuts or imposing a monthly benefit cap, he argues that a means-based test would be a fairer approach.
His paper looks at eliminating benefits for individuals over age 62 with net worth above $2 million, introducing a gradual reduction in benefits above that and lowering the threshold to generate enough savings to meet the shortfall.
Warshawsky's analysis finds that a $2 million threshold would reduce program costs by about 13.6%, while a gradual phase-out would save 11.8%, neither of which would fully close the projected financing gap.
The threshold would need to be lowered to approximately $1.1 million to $1.2 million, affecting nearly one-quarter of beneficiaries.
A survey of 2,000 Americans carried out last year by the Cato Institute, a Washington, D.C.-based libertarian think tank, found that Social Security as a form of longevity insurance remains popular, with 83% of respondents expressing a favorable view of the program and with broad support across Democrats, Republicans and independents.
Most workers (82%) expect Social Security to provide at least part of their retirement income and view it as a retirement savings program rather than a welfare program.
Yet Americans are pessimistic about its future.
Public opinion
The respondents say they believe that younger workers will receive a worse deal than current retirees, and that Congress has failed to manage the system effectively.
Many Americans underestimate the severity of Social Security's challenges, with most unaware of the projected funding shortfall.
While respondents generally supported modest reforms, like temporarily freezing benefits or slowing cost-of-living adjustments, they opposed more substantial measures including broad benefit cuts, raising the retirement age or means-testing.
Although many initially expressed support for higher payroll taxes, support declined significantly when the costs were presented in dollar terms.
The survey also revealed a generational divide, with younger Americans more willing to reduce benefits for current retirees in order to avoid paying higher taxes, while older Americans overwhelmingly preferred protecting existing benefits even if it required increased taxes on younger workers.
No surprises there, I suppose.
However, a solid majority (71%) supported creating an independent bipartisan commission to develop solutions.
Some people who can afford to invest their Social Security benefits wonder whether they'd be better off claiming early and investing their checks in the stock market.
With a 7% annual investment return, investing a $1,600 benefit starting at age 62 could result in a total of $80,000 or more by age 67.
That means you could end up with more money overall if you claim and invest starting at 62, but it also depends on how the market performs over those five years and on your longevity.
With a 10% return, you could accumulate more than $100,000 by 67 if you claimed at 62.
But once again, there are no guarantees of market performance.
And that, I'm afraid, brings this argument full circle once again.
Related: 'We're worried the honey pot will run dry': Does the government borrow from my Social Security to fund federal programs?
The Moneyist regrets he cannot respond to letters individually.
Check out The Moneyist's private Facebook group, where members help answer life's thorniest money issues.
Post your questions, or weigh in on the latest Moneyist columns.
More columns from Quentin Fottrell:
'It's heartbreaking': My brother claimed Social Security at 70.
He died from cancer after one payment.
Why wait to claim?
'I'd hate to end up with an unexpected tax bill': I'm 73 and still work full time.
Can I avoid paying taxes on my Social Security benefits?
'I've plenty of time on my hands': Advisers bombard me with offers of free steak dinners.
Is it wrong to go for the food?
By emailing your questions to The Moneyist or posting your dilemmas on The Moneyist Facebook group, you agree to have them published anonymously on MarketWatch.
By submitting your story to Dow Jones & Co., the publisher of MarketWatch, you understand and agree that we may use your story, or versions of it, in all media and platforms, including via third parties.
-Quentin Fottrell
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07-20-26 1830ET
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