Social Security break-even analysis may skew claiming decisions: experts

Key Points:

• Some social media influencers advocate claiming Social Security retirement benefits as early as age 62 to maximize cumulative payouts, based on a "break-even" age concept, but experts warn this approach lacks crucial context.
• The Social Security Administration discontinued break-even analyses in 2008 due to concerns it could encourage early claiming, which permanently reduces monthly benefits, and research shows it may strongly influence premature claims.
• Experts emphasize that Social Security functions as longevity insurance, and decisions should focus on the impact of claiming age on monthly benefit size, with maximum benefits available at age 70, which offers a 77% larger monthly check than claiming at 62.
• Other important factors include considering potential lifespan, integrating Social Security decisions into the broader financial plan including tax implications, and accounting for spousal survivor benefits to avoid reduced income for surviving partners.
• While many claim benefits early due to financial concerns or uncertainty about Social Security's future, research indicates those who wait until age 70 tend to experience greater financial security and less stress from market volatility.