A Top Social Security Advisor Is Concerned by the Recent Surge in Early Withdrawals

If all of the talk about the approaching Social Security trust fund insolvency has you worried and considering claiming your senior benefits early, you're not the only one. A new survey from the National Association of Registered Social Security Analysts (NARSSA) revealed how far-reaching that fear is and how many seniors are wondering if they should claim benefits early or risk missing out. Unfortunately, claiming benefits at age 62 may be an expensive mistake for some retirees.

Here's what to know about what's actually happening with Social Security, how your benefits might be impacted, and how claiming benefits early might affect you.

The NARSSA survey findings on claiming benefits early

The NARSSA survey was conducted in August, and 189 advisors were asked about what they were hearing from clients. The results suggest that the majority of retirees and near-retirees are worried, and 73.5% of advisors reported that their clients want to claim benefits early because of their fear of future benefits cuts.

Additionally, nearly 59% of advisors said that their clients doubt that Congress may fix the Social Security program's finances, and 62.4% of advisors reported their clients feel overwhelmed by the conflicting advice they're receiving. Forty-five percent of advisors stated their clients just wanted a clear answer about when it's best to claim benefits.

How insolvency might affect retirees' benefits

According to the 2026 Social Security Trustees' report, the Social Security retirement trust fund may be depleted by the fourth quarter of 2032, which is one quarter earlier than the 2025 report projected. If the trust fund becomes depleted, it could no longer pay full benefits; the program would be required to implement an automatic benefit reduction by law. That scenario could result in a benefits reduction of approximately 22%.

According to the Committee for a Responsible Federal Budget, that reduction could have a significant financial impact on households. A dual-income couple that retires right after Social Security's insolvency might lose about $16,900 per year in benefits, or about $1,408 per month. A single-earner couple might lose about $12,700 per year, or about $1,058 per month. Higher-income couples might lose as much as $22,300 per year, or about $1,858 per month.

The effects of claiming Social Security benefits early

If a retiree has enough work credits paid into Social Security, they may begin claiming benefits at age 62. However, if a retiree claims their benefits early, their benefits are permanently reduced.

To receive their full benefits amount, a retiree must wait to claim until the full retirement age, which is between 66 and 67. If retirees wait longer and claim benefits after the full retirement age, they receive a permanent benefits increase.

Claiming early may not pay off if a retiree is in good health and lives for, let's say, 20 or 25 years after they claim their benefits. Those benefits are permanently reduced, so a retiree actually collects less across a longer period of time than they might if they waited to collect until full retirement age.

Additional misconceptions about Social Security

The survey revealed that other misconceptions about Social Security are common. According to the results, 58% of advisors stated that clients didn't realize that they might be able to claim ex-spousal or ex-survivor benefits after a divorce. Some clients confuse spousal and survivor benefits.

About half of advisors stated that their clients are surprised to learn that Medicare premiums may reduce their monthly benefits; most people have their Medicare Part B premiums deducted from their Social Security benefits, so increases in Part B premiums may come as a surprise when benefits are reduced further in January.

The taxation of benefits is another point of confusion, with 34.9% of advisors reporting that their clients are surprised to learn that Social Security benefits may be taxable, and 33.9% reporting their clients feel they are being taxed twice.

The importance of planning, not panicking

Martha Shedden, President of the National Association of Registered Social Security Analysts, noted that the survey results signal that people are reacting out of fear. "This survey tells us that many Americans aren't necessarily claiming Social Security early because it is the best financial decision for them," she said. "Instead, they are claiming based on uncertainty about the program's future."

Shedden encouraged Americans to save as much as they could and to take a deliberate approach to claiming Social Security. "Social Security was never meant to be a 100% replacement of all our income," she said. "The critical thing is for individuals to plan, not panic."

Bottom line

Congress still has time to identify and implement solutions to keep Social Security solvent and prevent benefit reductions. This is an important topic to stay informed about, and legislators are already presenting potential solutions and reforms to preserve the program.

The decision of when to claim Social Security is a personal one, and it needs to be based on factors like your age, health, finances, and other reasons for claiming. Be sure that you fully understand the implications of claiming benefits early and don't just decide to claim out of fear about potential program changes. Taking a strategic, well-researched approach may help you make smart financial decisions and stay on track to meet your retirement goals.

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