Suze Orman Reveals the Biggest Social Security Mistake Retirees Keep Making

For decades, Suze Orman has been among the most outspoken voices in personal finance. She's a New York Times best-selling author, Emmy winner, host of the Suze Orman Show, and a trusted guide for everyday people trying to grow wealth.

Her message has always been clear. There are no shortcuts to retirement. Recently, she issued a warning about one mistake she says too many retirees make with Social Security benefits, and why it could cost you thousands of dollars over time.

When you claim Social Security matters

Orman consistently points to one error as the most costly. "Claiming Social Security before your full retirement age is one of the biggest mistakes you could possibly make." According to her, many people assume that starting benefits as soon as they're eligible is a safe bet, but she claims the reality is different.

When you file for retirement benefits as early as possible, which is age 62, you permanently reduce your monthly payment compared to waiting until full retirement age (FRA) or beyond.

Orman says, "Don't settle for a reduced Social Security benefit. If you are in good health, the best financial move you can make is not to claim Social Security before you reach your full retirement age." She emphasizes that the gains from delay can be significant, and the losses from early filing quietly compound.

Why the age at which you claim Social Security is important

Filing early does more than just reduce your monthly check. There's the potential for overall reduced lifetime income, reduced flexibility, and lower survivor benefits to consider.

Claiming Social Security benefits early means a smaller monthly payment forever

When you take benefits at 62, you miss delayed retirement credits that can boost your check for every month you work beyond FRA until age 70. Plus, you take a 30% reduction in your check compared to someone who retires at their full retirement age.

For someone healthy and with enough savings, Orman warns that this means fewer dollars in your later years when you may be unable to work and face rising costs.

You lose some of the compounding benefits that COLA provides when taking Social Security at FRA

Because Social Security COLAs rise from the base benefit you start with, a lower starting amount means smaller increases, even in later years.

"Every month past age 62 you don't claim your benefit entitles you to a slightly larger payout when you do start collecting. Over time, those small incremental increases add up," Orman explains.

Not only does your benefit increase by waiting, but each year's COLA will add more to your check as well. Since COLA is calculated as a percentage increase, the higher your base pay, the larger the boost you'll see in your bank account.

The way spousal and survivor Social Security benefits are structured can leave the surviving partner without enough money

If the higher-earning spouse claims too early and gets a reduced benefit, the surviving spouse's benefit is based on the smaller number.

Orman urges couples to consider delaying the highest earner. "At a minimum, I would strongly encourage married couples to consider a strategy that allows the highest earner to wait to start Social Security until age 70. That ensures that the surviving spouse will have the largest possible benefit."

Smaller monthly Social Security payments may give you less flexibility with your budget as costs rise

Retirees who claim early often find themselves locked into a tighter budget when unexpected costs arise. This is because their income base is lower and they are less able to withstand rising prices or health care challenges.

Orman doesn't deny that claiming at 62 can make sense for certain people, such as those with serious health issues, to consider filing early. Her caveat is that if you're healthy, have some savings, and expect a reasonably long retirement, then waiting adds a meaningful financial advantage.

What some other experts have to say about when to claim Social Security

Some financial advisors argue for claiming as early as possible and investing the benefit right away. For example, Dave Ramsey suggests taking benefits at 62 and putting them to work immediately. But Orman says that strategy is only viable if you're certain your investments will outperform the guaranteed increase from waiting.

Mainstream research also backs up Orman's theory. The Center for Retirement Research at Boston College, for example, found that many people who file at 62 are less financially prepared than those who wait. They also found that delaying claiming can meaningfully improve long-term retirement security.

Many other financial pros back up Orman's advice, framing the issue as Social Security being the foundation that you build the rest of your retirement plan around, rather than a life raft you grab the second it's available.

Orman's view, and one that's supported by the research, is that Social Security is a guaranteed, inflation-adjusted paycheck for life, so in most cases, it makes more sense to wait if possible, rather than leaning on uncertainties like future stock gains.

How to apply Orman's Social Security timing advice to your own situation

Before you decide, be sure to know your exact numbers. Check your "my Social Security" account and see how much you'd get each month if you filed at 62, FRA, and 70. Consider your health, your savings, and your immediate needs.

If you're healthy, have savings or income that you can use as a bridging strategy, then Orman strongly encourages you to consider delaying your claim until at least full retirement age. And, if possible, delaying until 70 to get the maximum delayed retirement credits and, therefore, the maximum benefit for life.

Bottom line

Suze Orman isn't saying you have to wait until 70 to retire, but she is warning that filing too early for Social Security without necessity and a clear plan can permanently reduce your income, weaken spousal protections, and limit your retirement flexibility. She insists that if you're reasonably healthy and financially capable, waiting can be one of the smartest moves you make.

Make a solid retirement plan instead of rushing to file your claim. You can also talk to a retirement planning specialist who can help you determine which path is the best for your household. While waiting until full retirement age or until 70 to maximize your senior benefits is the best option for many, it might not be the right choice for you.

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