Suze Orman Advises Against Early Social Security Claims Amid Trust Fund Warnings

OpenTheBooks CEO John Hart joined Varney & Co. to discuss mounting long‑term Social Security and Medicare deficits.

Concerns about the solvency of the Social Security trust funds have spurred many Americans to claim benefits early, fearing the program will run dry. Personal finance expert Suze Orman, however, cautions that this rush to claim at age 62 locks retirees into a permanent 30 % reduction.

“I’ve seen a lot of chatter on social media lately about Social Security that I think is bad advice,” Orman wrote on her website. “The message is that you are better off claiming as early as possible — at age 62 — rather than waiting to collect a larger benefit later. That’s just not good advice.”

The Social Security Administration’s 2026 Trustees Report confirms the Old‑Age and Survivors Insurance (OASI) Trust Fund is projected to exhaust its reserves in the fourth quarter of 2032, leaving the system with less than a decade before depletion. Once reserves run out, tax revenues would cover only about 78 % of scheduled retirement benefits.

People wait in front of a Social Security office in Citrus Heights, California, on July 12, 2023. (Getty Images)

For anyone born in 1960 or later, the full retirement age is 67, at which 100 % of earned benefits are payable. Claiming at 62 yields just 70 % of that amount—a permanent 30 % penalty. Orman explains that women who reach age 65 have an average life expectancy of 88, and the break‑even point for early versus delayed claiming is around age 79. After that, those who waited receive significantly higher monthly payments.

Orman also pushed back on the claim that filing early secures benefits before the trust funds run low. Current projections show a worst‑case scenario where, without congressional action, Social Security would pay roughly 80 % of scheduled benefits. She noted that the program has survived funding challenges before, citing the reforms of the early 1980s.

“If your benefit at 67 would be $2,000, claiming at 62 locks in $1,400. Applying a 20 % cut to both scenarios, the early claimer would receive about $1,260, while the delayed claimer would see $1,600,” Orman said.

There are two rare exceptions to early claiming: serious health issues or an inability to work or draw from retirement savings. Orman emphasized that the “strongest move” is to wait until age 70.

“For couples, the higher earner should delay filing as long as possible—ideally until 70. The surviving spouse receives the larger of the two benefits, so maximizing that amount is one of the most important financial gifts you can leave your partner,” she added.

Source link