Why So Many Retirees Are Rethinking When to Claim Social Security

For decades, many Americans grabbed Social Security the moment they turned 62. That habit is changing. Inflation swings, higher interest rates, headlines creating worry about the program's future, and the payoff for waiting are all pushing people to more carefully rethink when they should claim Social Security as they're planning for retirement.

Big inflation years made COLAs matter more

After years of modest increases, recent cost-of-living adjustments (COLAs) reminded retirees how much inflation can increase the value of their monthly check.

Benefits rose 8.7% in 2023, 3.2% in 2024, and 2.5% in 2025. And, importantly, COLAs don't go away if you wait to claim. Adjustments apply to the benefit formula and to payments once you do claim. So savers and people considering when to retire can get a bigger base benefit if they choose to delay.

Higher interest rates make "bridge" strategies manageable

The Federal Reserve's target interest range is now 4.00 and 4.25%, as of September 17, 2025, and short-term Treasury yields recently hovered around 3.6% for one-year maturities. Earning a few percent on safe cash gives some retirees a small extra income stream to help bridge expenses for a couple of years while they delay their benefits.

Many retirees choose to use T-bill interest, available cash, and continue working at least part-time to delay when they claim Social Security benefits, so they can lock in a bigger base monthly check for life.

Delayed retirement credits raise checks by about 8% per year after FRA

Waiting past full retirement age (FRA) adds delayed retirement credits (DRCs) of up to 8% per year for people born in 1943 or later. But only until age 70.

That increase is permanent. So, if your FRA is 67, starting at 68 means you'll receive 108% percent of your full benefit, and if you delay until age 70, you'll get 124%. So, if your base check at FRA is $1,800, if you waited until 68, your monthly benefit would rise to $1,944. And, if you delayed until 70, you'd receive a monthly check of $2,232.

It's also important to note that DRCs accrue monthly, not annually, at around 0.667% per month. So, in the above example, if you decided to claim at 67 and 6 months, you'd receive approximately 104% of your full benefit.

Access to SSA calculators to make the numbers clear

Those thinking about retirement can use the SSA's calculator to plug in their earnings records and personal info, and test how much they'll get in benefits based on when they file for their SSA. You can see how your monthly benefit changes if you file early at 62, at full retirement age, or at 70.

For example, if the calculator shows your FRA benefit at 67 is $2,000 per month, then you'll see $1,400 at age 62, and about $2,480 at age 70. That's a gap of up to $1,080 each month. Seeing your actual numbers from an official source makes it easier to pick an age that fits your budget, taxes, and work plans.

Part-time work can reduce checks now, but raise them later

If you claim before FRA and continue working, the earnings test can trim checks each year. In 2025, $1 is withheld for every $2 earned above $23,400. In the year you reach FRA, it's $1 for every $3 above $62,160.

But you don't actually lose those withheld months. When you hit FRA, SSA recalculates your benefit and credits back those months, and any new high-earning year can boost your record. For many people, this makes delaying retirement and continuing to work worth the wait for the larger monthly benefit amount.

Taxes on benefits can change the picture

Up to 85% of Social Security can be taxable, depending on your combined income. This means that 85% of your benefit can be added to your other taxable income at your normal tax rate.

Your combined income is adjusted gross income (AGI) plus nontaxable interest plus half your benefits. For single filers, if that total is below $25,000, there would be no tax on your benefits. Up to $34,000, up to 50% would be taxes, and above $34,000, up to 85% of your benefit could be taxable.

For joint filers, the thresholds are under $32,000, $32,000 to $44,000, and over $44,000, respectively. Some retirees delay benefits and spend down IRAs first to lower required withdrawals and possibly reduce how much of their benefit becomes taxable later.

Life expectancy is higher, so longevity risk is an important consideration

U.S. life expectancy rose to 78.4 years in 2023, which is up almost a full year from 2022. That rebound means that generally healthy people are expecting a longer retirement, so their money has to last longer.

The longer you live, the more a bigger monthly benefit helps cover essentials and health care inflation. That's why higher delayed benefits plus COLAs are increasingly appealing. Would-be retirees are looking at delaying their Social Security claims to give themselves more security for planning to live into their 80s and beyond.

Panic-inducing headlines make people make hasty decisions

In spite of all of the fearmongering in the media about Social Security running out, the 2025 Trustees Report only projects that the trust funds would be depleted in 2034. Which sounds scary, but payroll taxes would cover about 81% of scheduled benefits.

And that's only if Congress does nothing, which isn't likely. Instead of panic-claiming, the best options are to look at your retirement plan, coordinate spousal/survivor benefits, and figure out the best claim date for your specific circumstances.

Bottom line

Before you claim your Social Security benefit, use every available resource and recheck your retirement plan. You want to make sure you set yourself up for retirement the right way. Run your numbers using the SSA's calculators, plug in your work plans, earnings, and taxes, and check current yields to see how delaying for a larger check could help your retirement budget.