Suze Orman says claiming Social Security too soon could drain your income and destabilize your retirement years before they even begin.
Many people know they can claim benefits at 62. Fewer realize how much that decision could cost over time. As Orman recently told 24/7 Wall St., early claiming can create a lifetime of reduced income and financial strain.
The simple math behind a costly choice
According to Orman, the difference between claiming at 62 and waiting until your full retirement age — between 66 and 67 for most people — can mean a permanent cut of up to 30%.
If your full benefit at 67 is $2,000 a month, taking it at 62 lowers it to about $1,400. That’s $600 less every month, or $7,200 a year. Over 20 years of retirement, that decision could leave $144,000 uncollected.
That reduction compounds as costs rise. Medical bills increase, daily expenses climb, and your lower benefit stays nearly flat, adjusted only for small cost-of-living increases. Over time, your purchasing power erodes while expenses march on.
Timing matters more than ever
Orman’s warning hits home because today’s retirees face a very different landscape than their parents did. People live longer, healthcare costs more, and traditional pensions are rare. For many, Social Security is the only guaranteed, inflation-adjusted income that lasts a lifetime.
Savings accounts run dry. Market downturns happen. But Social Security continues to pay every month, no matter what. The larger your check, the more flexibility you have when the unexpected happens.
Orman adds that waiting beyond full retirement age can be even more rewarding. Each year you delay benefits until age 70 increases your payment by about 8%. That’s a guaranteed return few investments can match — without risk or volatility.
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Claiming early sometimes makes sense
Orman acknowledges that claiming early may be wise for those with health concerns or shorter life expectancies. If your health is poor or you have a family history of shorter lifespans, claiming early may help you make the most of the time you have. The best plan depends on your personal circumstances.
Early claiming can also make sense if you urgently need income for basic expenses, want to pay off high-interest debt, or coordinate with a spouse’s benefits. It can work for retirees with substantial savings who can afford a smaller check without long-term strain.
The retirement trap nobody sees coming
The real danger, Orman warns, is claiming early without understanding the long-term impact. Many retirees underestimate how long they will live and overestimate how far their savings will stretch. That mix often leads to financial stress in later years.
Imagine reaching 85 with medical expenses rising and a benefit that’s $600 less each month than it could have been. Savings are gone. Costs keep climbing. It’s a scenario that affects millions who took the early option without planning for the decades ahead.
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To claim or not to claim
Before making your Social Security decision, run the numbers with the Social Security Quick Calculator. How would your finances look if you claimed at 62, 67, or 70? Consider your health, family longevity, and other income sources. A qualified financial adviser can model your options and reveal the long-term trade-offs.
Remember that the choice is permanent. Unlike an investment you can rebalance, this one is set in stone. The difference between claiming early and waiting could shape your financial comfort for decades.
Patience may be the single most valuable investment you ever make in retirement. As Orman notes, delaying gratification today could buy you peace of mind tomorrow — and every month after that.
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