Retirement & Financial Planning Report

Choosing when to begin drawing Social Security benefits is a complex decision not well understood by many of those facing it—and the SSA falls well short of providing the help they need, GAO has said.

Those eligible for Social Security benefits can generally elect to receive them starting at age 62, but the monthly benefit amount increases, permanently, the longer someone delays claiming, until age 70. Waiting to claim offers the promise of higher monthly benefits—76 percent higher for someone claiming at age 70 versus age 62, for current claimants.


“However, 62 is the most common age to claim Social Security benefits, and few people wait until 70. While there are sound reasons for taking retirement benefits early, such as financial need or short life expectancy, many people might benefit from claiming at a later age. Making an optimal claiming decision requires individuals and households to understand how multiple factors—such as claiming age, earnings, life expectancy, and longevity risk—affect benefits,” GAO said.

“Many people approaching retirement age are unclear on how claiming age affects the amount of monthly benefits, how earnings (both before and after claiming) affect benefits, the availability of spousal benefits, and other factors that may influence their claiming decision . . . With an understanding of Social Security benefits, people would also be in a better position to balance other factors that influence when they claim benefits, including financial need, poor health, and psychological factors,” it said.

It said that while information is available through SSA, including on its website, “some key information may not be consistently provided to potential claimants when they file.”

Such topics include how claiming age affects the monthly benefit amount; how taking a retroactive benefit allowed in certain circumstances—which results in a lump-sum payment—also would affect the ongoing benefit; how lifetime earnings affect monthly benefits, including considerations for those who have fewer than 35 years of Social Security coverage; how earnings after benefits begin may reduce benefits through the Earnings Test; and how life expectancy could factor into the decision.

In contrast, it said, while claims examiners are supposed to present claimants only with information  and not advice, such as a projected “break-even age” which can have a strong influence on the person’s decision, some GAO observed not only presented such a projection but added their own conclusions and advice based on it.