How to Help Americans Claim Social Security at the Right Age

Sep 22, 2020 / Amanda Chase, Horsesmouth Assistant Editor

Social Security is the foundation of retirement security in America. Among households headed by someone aged 65 or over, more than half rely on Social Security benefits for a majority of total income, while 19% depend on Social Security for at least 90% of income. One of the key financial decisions facing older Americans is when to claim Social Security retirement benefits. While these benefits are available as early as age 62, claiming later permanently raises monthly benefits, with the maximum benefits available to those who claim at age 70. Delaying claiming is thus equivalent to purchasing a greater inflation-adjusted annuity that will be paid for as long as the beneficiary lives. Most people, however, do not claim Social Security at their optimal age, usually because they claim too early. This brief examines why older Americans typically do not claim Social Security optimally and how public policy can help them make better claiming decisions.

One way policies could improve the claiming decision is to make information about Social Security more useful, consistent, and clear. This includes reinstating the paper Social Security Statement so that SSA can communicate annually with Americans. Officials could also redesign the statement and improve the information it provides to better highlight key points and correct common misconceptions. Other communication improvements are online tools, in-person office visits, and a re-framing of claiming decisions.

The SSA should consider adding new steps to the claiming process to help older Americans better understand Social Security’s rules and the tradeoffs of different claiming options. These steps could include having claimants sign a form acknowledging permanent benefit reductions from early claiming; giving claimants a blank bar chart on which they would enter the monthly benefits they would receive if they claimed at age 62, their FRA, and age 70; or introducing online pop-up messages with similar information.

There are also ways to reform Social Security’srules and other public policy to help individuals optimize their claiming decisions. These include eliminating earnings test—or at least rebranding it and better educating the public about its rules. Another method is to provide lump-sum benefits for delayed claiming, which could create effective incentive for people to claim benefits later. Perhaps most importantly, they could introduce a mandatory add-on savings account to Social Security or existing 401(k) plans to facilitate later claiming. This would help people use assets to bridge the gap between retirement and claiming.

You can find the full report, “How to Help Americans Claim Social Security at the Right Age” at


This material is provided exclusively for use by individuals with an active license to the Savvy Social Security Planning Program. Use of this material is subject to the Social Security Planning Program Agreement and applicable copyright laws. Unauthorized use, reproduction or distribution of this material is a violation of federal law and punishable by civil and criminal penalty. This material is furnished “as is” without warranty of any kind. Its accuracy and completeness is not guaranteed and all warranties express or implied are hereby excluded.

© 2020 Horsesmouth, LLC. All Rights Reserved.