A new report from the Urban Institute found more seniors were filing early for Social Security in 2025 compared to 2024 amid a looming shortfall that could see payments slashed by 20 percent.
Why It Matters
Social Security serves more than 70 million Americans, but the Social Security Administration (SSA) is currently facing a funding shortfall that will see benefits slashed as early as 2033 if nothing changes, according to recent estimates.
More seniors could be filing early despite the fact that it gives them a lower payment amount due to concerns that the SSA will soon run out of money for full payments.
What To Know
In addition to retirement claims climbing by 276,000 between October 2024 and April 2025 from the year prior, retirees are also filing for benefits at younger ages.
A surge of retirees claimed their benefits at just 62 years old this year, which is the minimum retirement age to start receiving payments.
The Urban Institute’s report indicates that uncertainty around changes to the SSA could be fueling the higher numbers of retirees claiming benefits.
“Many seniors are choosing to file earlier because they fear their benefits could be reduced in the future,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “By filing now, they believe they’re locking in distributions before any potential cuts.”
However, many financial experts have warned that claiming at age 62 has dire effects on retirement funds long term because it will shrink the amount of money you can earn from Social Security.
With a full retirement age of 67, filing at 62 brings down your monthly benefits by 30 percent, according to The Motley Fool, a private financial and investing advice company.
Early claims only make sense in a few situations, like if you had to retire early and can’t live without the income without taking a significant amount from your 401(k) or IRA, or if you’re sick and don’t have a spouse who would earn your survivor benefits.
“For current beneficiaries, filing before full retirement age comes with a reduction in benefits,” Thompson added. “That’s the immediate trade-off. But for future retirees, the impact is minimal in the near term—Social Security is currently funded until around 2090.”
The logo of the US Social Security Administration is seen outside a Social Security building, November 5, 2020, in Burbank, California.
The logo of the US Social Security Administration is seen outside a Social Security building, November 5, 2020, in Burbank, California.
VALERIE MACON/AFP via Getty Images
What People Are Saying
Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: “Some are labeling this increase in seniors filing for Social Security benefits at early ages as a surprise—it isn’t. There are so many factors that are playing in too many trying to access their benefits at earlier ages: early retirement, a changing job market, fears over economic uncertainty, and fears over the program’s solvency, just to name a few.”
“If you’re concerned about both your financial future and the future of this major government program, you may opt to say, ‘I’m going to get what benefits I paid into while I’m sure I still can.’ Because at the moment, there’s no sign of the economic turmoil and legislative unrest that has plagued Americans over the last few months coming to an end.”
Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek: “The bigger concern is the trust fund depletion projected for 2033–2034, depending on which estimate you look at. After that point, if nothing changes, benefits could be reduced across the board.”
What Happens Next
While Congress will need to take legislative action to prevent the impending trust fund shortfall, Thompson anticipates it will take a few more presidential administrations to fully address.
“This issue has been kicked down the road for years because Social Security isn’t a revenue-generating program. It’s a cost line item,” he said. “Legislators will eventually have to deal with it, but chances are it will be left for the next few administrations to solve.”