Retirement Social Security

The Single Biggest Social Security Error That Is Costing Boomers a Fortune

The claiming mistake that costs many boomers far more than expected.

By David Maina

Edited by Laura Hohenstein

Updated Jan. 13, 2026

For many baby boomers, the most important retirement decision is when to claim Social Security. Too often, that choice gets made quickly, without fully weighing the long-term cost.

Research from investment firm Schroders shows that nearly 90% of working Americans do not plan to wait until age 70 to claim benefits, even though waiting delivers the largest possible monthly check. Skipping the wait can feel like a small tradeoff at the time, but it adds up over decades and can make it harder to retire comfortably.

Below, we explain why this single timing mistake quietly drains a significant amount of income from many boomers over their lifetime.

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How Social Security benefits are calculated and why waiting pays off

Your Social Security benefit follows a formula, and once you understand it, the cost of claiming too early becomes hard to ignore.

Social Security starts by looking at your 35 highest-earning years, adjusted for wage growth. It averages those earnings to calculate your Average Indexed Monthly Earnings (AIME), then applies a formula to determine your Primary Insurance Amount (PIA). Your PIA is the monthly benefit you receive if you claim at full retirement age (FRA).

For most baby boomers, full retirement age is 66 or 67, depending on birth year. At that point, you receive 100% of your calculated benefit.

If you start at 62, the earliest possible age, your benefit is permanently reduced. For someone with a full retirement age of 67, claiming at 62 cuts the monthly check by about 30%. That reduction lasts for life and applies to every future cost-of-living adjustment (COLA).

Waiting works in the opposite direction. Delaying past full retirement age earns delayed retirement credits. Each year you wait adds about 8% to your monthly benefit, up to age 70. This increase is permanent and raises every future payment.

In practical terms, delaying raises your starting check and every check that follows.

Here is a simple example based on current rules from the Social Security Administration (SSA):

Full retirement age benefit: $2,000 per month
Claim at 62: about $1,400 per month
Claim at 70: about $2,480 per month

That is a $1,080 monthly difference between early and delayed claiming, and it continues for as long as you receive benefits.

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The cost of claiming too early

The common belief is that taking Social Security checks for more years makes up for a smaller monthly amount. In practice, early claiming permanently reduces your income, and that tradeoff often works against you.

Research from Boston University and the Federal Reserve Bank of Atlanta points to a steep cost of claiming early. The typical worker gives up about $182,000 in lifetime benefits by filing before age 70. And this is not a rare outcome, as nearly half of Americans claim before FRA, and about 25% as soon as benefits become available at 62, according to Social Security data.

While early claiming puts money in your pocket sooner, larger monthly checks from waiting often catch up and surpass those early payments.

Longer retirements make this trade-off clearer. Today, a 62-year-old man can expect to live into his early 80s, and a woman into her mid-80s, based on Census Bureau data. For anyone likely to reach their 80s or beyond, delaying typically results in higher total lifetime benefits.

There is also a survivor impact that many people overlook. If you are the higher earner, your claiming age determines the survivor benefit your spouse may rely on later.

Claim early, and you lock in a smaller survivor check. Delay, and you leave behind a larger, inflation-adjusted income stream that can matter most when one income is gone.

The 12-month rescission rule

Once you claim Social Security, the decision is mostly final, and there is no simple reset button. The only true do-over is the 12-month withdrawal rule, and it is harder to use than many people realize.

If you change your mind within 12 months of your first payment, Social Security allows you to withdraw your application. But the catch is that you must repay every dollar you and your family have received. That often means coming up with a large lump sum, which can put this option out of reach for many retirees.

The window is also strict. You can use this withdrawal only once, and only within the first 12 months. After that deadline passes, your benefit amount is locked in for life. Many people who claim at 62 either overlook this rule or realize too late that they cannot afford to reverse the decision.

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Bottom line

Claiming Social Security early can feel unavoidable. A job loss, rising health costs, or limited savings may push you to file sooner than planned.

Still, before you commit, it helps to pause and look for other options, such as trimming expenses or delaying withdrawals from other accounts. If waiting is possible, even until full retirement age at 66 or 67, the long-term payoff can be meaningful.

The key is balancing short-term needs against long-term costs so you can avoid money mistakes that are hard to reverse. Using SSA calculators or reviewing scenarios with a qualified advisor can help you make a decision you won't regret later.

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