The Americans are rethinking when to retire and claim Social Security as longer lifespans collide with uncertainty about the program’s future.
Social Security could become insolvent by late 2032 or early 2033, which could trigger automatic benefit cuts if Congress fails to act. At the same time, Americans are living longer, expanding retirement of around 15 years, or even almost three decades in some cases, depending on at Realtor.com.
More than 68 million Americans rely on Social Security benefits in April 2026, according to the Social Security Administration.
Waiting until age 70 to start collecting Social Security locks on the highest monthly payment, but applying earlier can help protect against possible reductions.
Trump signs order to help expand access to retirement accounts
Social Security could become insolvent by the end of 2032 or the beginning of 2033. (iStock)
“Social security certainly has a funding problem,” said Evan Mills, a financial analyst at Scholar Advising. “If you say now, you’re basically betting that Congress is doing nothing to address the underfunding problem.”
But delaying benefits carries its own risks.
“You’re also betting that you won’t live long enough to regret accepting a smaller check if Congress does intervene and resolve the financing problem, over which they have many levers,” he added.
Rising costs add to the pressure. Inflation, higher property taxesinsurance and healthcare costs also weigh on retirees, especially those on fixed incomes, Realtor.com reported.
“Many retirees have made plans assuming that Social Security would cover a higher percentage of their living expenses than it actually would,” said Elias Friedman, certified financial planner and founder of Kadima Wealth.
WORK MORE, LOSE LESS? NEW BILL AIMS TO END SOCIAL SECURITY SANCTIONS
Rising costs add to the pressure. Inflation, rising property taxes, insurance and health care costs also weigh on retirees. (iStock)
Taxes can further complicate the decision. Claiming benefits early while withdrawing from retirement accounts can trigger what are called “tax torpedoes,” leading to a sudden increase in tax liability.
“It takes a bigger chunk out of your Social Security benefits than you think,” George Dimov, CPA and founder of Dimov Tax, told Realtor.com.
Regardless, experts advise against making decisions based on fear.
“I advise clients to be cautious about making important Social Security decisions based solely on scary headlines,” Friedman said. “I continue to believe that delaying benefits can make a lot of sense for healthy retirees who expect longevity, especially for married couples where maximizing benefits for higher earners can help protect the surviving spouse in the future.”
NEARLY HALF OF GENERATION
Taxes can further complicate the decision. (iStock)
GET FOX BUSINESS ON THE GO BY CLICKING HERE
With so many unknowns, experts also say flexibility is key, whether it’s working longer, cutting costs, reducing headcount or adjusting expenses.
“Living longer means finding a place to live longer,” Realtor.com senior economist Joel Berner told FOX Business in an email. “As we are seeing, monthly budgets based on Social Security income may no longer be as secure as they once were, so finding a low-cost housing option is essential to planning a long and happy retirement.”