Key Takeaways
- Social Security’s trustees project that the retirement trust fund will run out of reserves in late 2032. After that, incoming revenue would cover 78% of scheduled benefits unless Congress acts.
- A hypothetical 62-year-old due $2,000 a month at full retirement age who claims now gets $1,400, which is $7,200 a year less for life.
- Claiming early doesn’t protect a check from a shortfall, because a shortfall would also shrink checks that are already being paid.
- Someone who claims in a panic can withdraw the application once within 12 months by repaying the benefits they received.
If you’re 62 and Social Security’s funding problem has you thinking about claiming now while the money’s still there, I’d hold off.
Social Security’s trustees project that the trust fund paying retirement and survivor benefits will run out of reserves in the fourth quarter of 2032, according to their 2026 annual report. Since the midterms, that date has been back on the financial shows, because the lawmakers just elected are the ones who’ll have to deal with it.
Running out of reserves doesn’t mean running out of money
Social Security keeps taking in revenue after 2032, so the trust fund running dry would shrink checks rather than stop them. The trustees project that incoming revenue would cover 78% of scheduled benefits at that point, sliding to 62% by 2100. If the retirement fund is counted together with the disability fund, the reserves last until the third quarter of 2034, with 83% payable then.
And all of it is a projection. Congress hasn’t voted on any cut, and the trustees are urging lawmakers to act in time to phase changes in gradually.
6 safe dividend stocks paying retirees 6%+ yields
There are over 100 stocks paying 6%+ annual dividends today.
But after an extensive investment review leveraging TIKR’s proprietary data, we now believe only six of them are truly safe for retirees.
They’re all yours for free as part of our new investment report, which you can access right here.
Claiming at 62 locks in a 30% cut for life
Let’s take a hypothetical 62-year-old whose benefit at full retirement age would be $2,000 a month. For anyone born in 1960 or later, full retirement age is 67, and claiming at 62 cuts the benefit 30% for life. So if she files now to get ahead of 2032, her check is $1,400 a month instead of $2,000.
That’s $600 a month, or $7,200 a year, that she gives up for as long as she collects.
And she’d turn 67 in 2031, a year or so before the trustees expect the reserves to run out. If she waits, she collects her full $2,000 before the date she’s worried about even arrives.
An early claim gets no shelter from a shortfall
Suppose Congress let the reserves run dry and the 78% kicked in. It would apply to scheduled benefits, and her reduced $1,400 check is a scheduled benefit like any other. At 78%, her check would drop to $1,092. The $2,000 she’d have gotten by waiting would drop to $1,560, so she’d still be $468 a month behind. By claiming early, she’d just stack the two cuts on top of each other.
The early claimer does get a head start, though. Five years of $1,400 checks, from 62 to 67, add up to $84,000. At $600 a month, the bigger check takes 140 months to make that up. So on today’s figures, waiting comes out ahead from shortly before her 79th birthday.
A claim filed in a panic can be undone
Fortunately, Social Security gives early claimers one do-over. Within 12 months of the first month she’s entitled to benefits, she can withdraw her application. She has to ask in writing and repay the benefits she received, and she can only do it if she’s never withdrawn an application before. If she changes her mind six months in, that’s $8,400 to pay back. Then she can apply again later, at 67 if she likes, for the full $2,000.
That makes a panicked claim fixable, but only for a year, and only once.
A certain cut to dodge an uncertain one
Here’s where I land: claiming at 62 to beat 2032 trades a certain 30% cut for protection from a cut that may never come, and that cut wouldn’t spare her check if it did come. There are fine reasons to claim at 62, like poor health or needing the income now, but the trust fund date isn’t one of them.
Of course, Congress could change the rules before 2032 by raising revenue, trimming benefits or both, and nobody knows yet which way it’ll go. The trustees will update their projection again next year. So anyone weighing an early claim gets a fresh look at the numbers before making a call they can only undo once.
Enjoy your retirement in style with these safe 6%+ dividend yields
Dividends can hold the key to enormous wealth. But only if you buy the right ones.
Picking the right high-yield dividend stock can be the difference between a dream retirement…and scraping by every month, waiting for the next Social Security check to clear.
We’ve identified six stocks yielding 6%+ that we believe every retiree should know about right now.
Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
