Should You Consider Taking Social Security Before Age 70?
According to a recent Wall Street Journal article, there were 580,887 pending Social Security claims in March 2025. That's an increase of more than 80,000 from a year ago. Many of those claimants are seniors who have not yet reached their full retirement age.
I'd love to believe that the majority of these folks are taking Social Security early as part of a carefully considered plan to achieve a specific goal, such as early retirement. But, unfortunately, fear and short-sightedness often play far too big a role in the Social Security decision, especially for seniors who aren't working with an advisor.
On today's show, we clear up some of the misconceptions around Social Security and explain how Keen Wealth incorporates this important benefit into our comprehensive planning process.
Why should I wait?
Seniors can start collecting their Social Security benefits at age 62. But if you wait until your full retirement age (67 for folks born after 1960), your benefits will increase by 30%. If you keep delaying, your benefits will continue to rise by approximately 8% per year until you reach 70.
In short: at age 62 you'll receive 70% of your full retirement benefits. At age 70, you'll receive 124%.
So, assuming you can live off your other assets or keep working and earning income, the best reason to delay taking your Social Security is to let your benefit keep growing until it maxes out.
Tax planning is another important consideration. If you're earning income or making taxable withdrawals from your accounts early in retirement, up to 85% of your Social Security benefits could be taxable. But later in retirement, if you're not earning as much or living off tax-free withdrawals, your maxed benefits might be tax-free as well.
Why might I take my benefits early?
Usually, taking Social Security early is the last option Keen Wealth will consider when helping folks plan for a specific goal. A balanced, diversified financial plan almost always provides other levers we can pull to keep folks living their best lives while their Social Security benefits keep rising.
One scenario where taking Social Security early can be beneficial is for married couples. The lower-earning spouse might take Social Security early while their higher earner delays and maximizes their benefit. If the higher earner passes away, the lower earner is eligible to collect the higher of the couple's benefits.
Seniors who are dealing with a terminal diagnosis might decide to take Social Security early if they may not live long enough to collect their full benefits.
Using Social Security benefits to cover living expenses might also help a senior preserve their other assets and maximize their legacy giving.
Finally, you might find yourself in an emergency situation where taking reduced benefits is the best way to cover a life-threatening medical condition or housing issue. Even in an emergency, it's still important to consult with your financial advisor and make sure you're considering every available option.
What if Social Security goes bankrupt?
If you're 62 and you see a headline like "Social Security Trust Fund Will Deplete by 2035!" waiting until you're 70 to claim your benefits might seem like a risky proposition.
But the truth is that projections about Social Security running out of money all revolve around one big assumption: that our leaders in Washington do nothing to fix the problem. And while we're all frustrated about the gridlock and divisiveness that drive so much of our politics right now, it's just not realistic to expect politicians would tempt the wrath of so many older voters by allowing Social Security to go bankrupt. They might kick the can to the next congress and the next president as long as possible. But too many seniors pay into Social Security and depend on their benefits for the program to be reduced in ten years.
As for accusations of fraud and wasteful spending, another hot topic at the moment, the Social Security Administration estimates that improper payments total around 0.3% of all benefits paid. Hopefully that percentage keeps heading down, but there's not enough fraud to threaten your benefits either.
What if my benefits get cut?
Years from now, if Congress can't agree on how to keep the Social Security trust solvent, could capping or cutting benefits be on the table? Possibly.
Again, we're years, if not decades, away from that happening. But Keen Wealth does "stress test" individual retirement plans to determine how reliant folks are on Social Security. Given that the government would have to give folks a pretty long runway to prepare for a major benefit overhaul, my team will be able to make multiple projections to help folks adjust their plans.
Of course, Social Security is just one important variable in Keen Wealth’s comprehensive planning process. If you don’t have that full plan in place, it can be almost impossible to anticipate how the choices you make today could affect your finances in the future. Visit Keen Wealth and let’s work together on a plan that will make you feel more confident about your Social Security decision and your retirement.
About Bill
Bill Keen is a financial advisor with over 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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