{"id":108216,"date":"2025-07-31T18:33:13","date_gmt":"2025-07-31T18:33:13","guid":{"rendered":"https:\/\/www.europesays.com\/us\/108216\/"},"modified":"2025-07-31T18:33:13","modified_gmt":"2025-07-31T18:33:13","slug":"millions-of-americans-are-making-a-social-security-mistake-that-could-cost-them-100000-or-more-in-retirement-income","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/108216\/","title":{"rendered":"Millions of Americans are making a Social Security mistake that could cost them $100,000 or more in retirement income"},"content":{"rendered":"<p>Most Americans significantly underestimate the amount they lose by claiming Social Security retirement benefits before age 70, and the <a href=\"https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" target=\"_blank\" rel=\"noopener nofollow\" aria-label=\"Go to https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" class=\"sc-19cc8fd2-0 iHosVH\">2025 AARP 90th Anniversary Survey<\/a> highlights widespread knowledge gaps about optimizing benefits.<\/p>\n<p>What\u2019s more, many Americans indicated they would cash in early amid concerns about the program\u2019s future. In just seven years, Social Security will\u00a0<a href=\"https:\/\/fortune.com\/2025\/06\/23\/social-security-trustees-report-2025-depletion\/?utm_source=search&amp;utm_medium=suggested_search&amp;utm_campaign=search_link_clicks\" target=\"_self\" aria-label=\"Go to https:\/\/fortune.com\/2025\/06\/23\/social-security-trustees-report-2025-depletion\/?utm_source=search&amp;utm_medium=suggested_search&amp;utm_campaign=search_link_clicks\" class=\"sc-19cc8fd2-0 iHosVH\" rel=\"nofollow noopener\">reach a fiscal cliff<\/a>\u00a0that could leave millions of American retirees with an <a href=\"https:\/\/fortune.com\/2025\/07\/28\/when-will-social-security-run-out-insolvent-warren-buffett-crfb\/\" target=\"_self\" aria-label=\"Go to https:\/\/fortune.com\/2025\/07\/28\/when-will-social-security-run-out-insolvent-warren-buffett-crfb\/\" class=\"sc-19cc8fd2-0 iHosVH\" rel=\"nofollow noopener\">$18,000 annual cut<\/a>, according to a\u00a0<a href=\"https:\/\/www.crfb.org\/blogs\/retirees-face-18100-benefit-cut-7-years\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" aria-label=\"Go to https:\/\/www.crfb.org\/blogs\/retirees-face-18100-benefit-cut-7-years\" class=\"sc-19cc8fd2-0 iHosVH\">recent analysis<\/a>\u00a0by the Committee for a Responsible Federal Budget (CRFB).\u00a0<\/p>\n<p>Key findings from the AARP report related to what Americans know about Social Security:<\/p>\n<ul>\n<li><strong>While most Americans (74%) believe they are informed about how Social Security works, few can correctly identify the optimal ages for claiming.<\/strong>\u00a0Only 24% know that the earliest age to claim retirement benefits is 62, and just 19% identify age 70 as the point when monthly benefits are maximized\u2014a figure that underscores substantial public confusion about optimal claiming strategies<a href=\"https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" aria-label=\"Go to https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" class=\"sc-19cc8fd2-0 iHosVH\">.<\/li>\n<li><strong>More than 80% of Americans say it is important to understand the best age to start benefits,<\/strong>\u00a0but two-thirds did not know that waiting until age 70 yields the highest possible monthly payment<a href=\"https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" aria-label=\"Go to https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" class=\"sc-19cc8fd2-0 iHosVH\">.<\/li>\n<li>This lack of knowledge has material consequences: by claiming before age 70, beneficiaries lock in permanently lower monthly payments. The report explicitly states, \u201cmost lack the knowledge necessary to make wise decisions about when to start receiving retirement payments.\u201d<\/li>\n<li><strong>The deficit in understanding is especially pronounced among those under 50, but even among those 50+, 66% did not know the age for maximum benefits.<\/strong>\u00a0This points to a systemic problem in retirement planning and public education<a href=\"https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" aria-label=\"Go to https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" class=\"sc-19cc8fd2-0 iHosVH\">.<\/li>\n<li><strong>The practical implication is that millions of Americans are inadvertently leaving money on the table<\/strong>\u00a0by claiming benefits before age 70, often under the mistaken impression that earlier claiming is necessary or optimal<a href=\"https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" aria-label=\"Go to https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" class=\"sc-19cc8fd2-0 iHosVH\">.<\/li>\n<\/ul>\n<p>The AARP 2025 survey shows evidence that a majority of Americans are unaware that delaying Social Security retirement benefits until age 70 maximizes their monthly income, leading many to lose out on substantial guaranteed retirement income because of uninformed choices<a href=\"https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\" aria-label=\"Go to https:\/\/www.aarp.org\/content\/dam\/aarp\/research\/topics\/work-finances-retirement\/social-security\/social-security-90th-anniversary-survey.doi.10.26419-2fres.00976.001.pdf\" class=\"sc-19cc8fd2-0 iHosVH\">.<\/p>\n<p>What cashing in too early could cost, based on general averages:<\/p>\n<p><strong>Full Retirement Age (FRA):<\/strong> 67 (for those born in 1960 or later)<\/p>\n<p><strong>Monthly benefit at FRA:<\/strong> ~$1,800 (as of <a href=\"https:\/\/www.kiplinger.com\/retirement\/social-security\/average-monthly-social-security-check#:~:text=Table_title:%20Average%20Social%20Security%20check%20for%20June,734%2C000%20%7C%20Average%20monthly%20benefit:%20%24924.65%20%7C\" target=\"_blank\" rel=\"noopener nofollow\" aria-label=\"Go to https:\/\/www.kiplinger.com\/retirement\/social-security\/average-monthly-social-security-check#:~:text=Table_title:%20Average%20Social%20Security%20check%20for%20June,734%2C000%20%7C%20Average%20monthly%20benefit:%20%24924.65%20%7C\" class=\"sc-19cc8fd2-0 iHosVH\">recent SSA data<\/a>)<\/p>\n<p><strong>Claiming at 65:<\/strong> Results in ~86.7% of your FRA benefit, or ~$1,560\/month<\/p>\n<p><strong>Claiming at 70:<\/strong> Results in 124% of your FRA benefit, or ~$2,232\/month<\/p>\n<p><strong>Life expectancy:<\/strong> Around 85<\/p>\n<p>Lifetime benefit comparison (from age claimed to age 85):<\/p>\n<ul>\n<li><strong>Claim at 65:<\/strong><br \/>$1,560\/month \u00d7 240 months = <strong>$374,400<\/strong><\/li>\n<li><strong>Claim at 70:<\/strong><br \/>$2,232\/month \u00d7 180 months = <strong>$401,760<\/strong><\/li>\n<\/ul>\n<p>That\u2019s a <strong>difference of $27,360<\/strong>, but\u2026<\/p>\n<p>Why the real loss may be higher:<\/p>\n<ul>\n<li>If you <strong>live past 85<\/strong>, the higher monthly payment keeps adding up.<\/li>\n<li>If you have a <strong>spouse<\/strong>, survivor benefits based on your record could also be reduced.<\/li>\n<li><strong>Cost-of-living adjustments (COLA)<\/strong> are applied to a higher base amount if you wait, compounding over time.<\/li>\n<\/ul>\n<p>Summary:<\/p>\n<ul>\n<li>Claiming at 65 means <strong>five years of earlier, lower benefits<\/strong>.<\/li>\n<li>Waiting until 70 means <strong>delayed but higher benefits<\/strong> that are more advantageous long-term.<\/li>\n<li>For an average American who lives a full retirement, claiming at 65 instead of 70 could easily mean losing <strong>$50K\u2013$100K+<\/strong> in total lifetime income.<\/li>\n<\/ul>\n<p>For this story,\u00a0Fortune\u00a0used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.\u00a0<\/p>\n<p><strong>Introducing the 2025 Fortune 500<\/strong>, the definitive ranking of the biggest companies in America.\u00a0<a href=\"https:\/\/fortune.com\/ranking\/fortune500\/?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=plea_text\" target=\"_self\" aria-label=\"Go to https:\/\/fortune.com\/ranking\/fortune500\/?&amp;itm_source=fortune&amp;itm_medium=article_tout&amp;itm_campaign=plea_text\" class=\"sc-19cc8fd2-0 iHosVH\" rel=\"nofollow noopener\">Explore this year&#8217;s list.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"Most Americans significantly underestimate the amount they lose by claiming Social Security retirement benefits before age 70, and&hellip;\n","protected":false},"author":3,"featured_media":108217,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[15],"tags":[1081,64,26274,255,700,6763,711,1439,67,132,68],"class_list":{"0":"post-108216","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-aging","9":"tag-business","10":"tag-fortune-intelligence","11":"tag-personal-finance","12":"tag-retirement","13":"tag-savings","14":"tag-social-security","15":"tag-u-s","16":"tag-united-states","17":"tag-unitedstates","18":"tag-us"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/114949285643938944","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/108216","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=108216"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/108216\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/108217"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=108216"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=108216"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=108216"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}