WSJ Your Money Briefing - Americans Are Claiming Their Social Security Benefits Earlier

Episode Date: May 12, 2025

The Trump administration has called for sweeping changes to government agencies and fueled claims of fraud in the Social Security administration — all of which has shaken faith in the decades-old institution. Wall Street Journal reporter Anne Tergesen joins host Julia Carpenter to discuss why some seniors are claiming their benefits earlier than expected.  Sign up for the WSJ's free Markets A.M. newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

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Here's your Money Briefing for Monday, May 12th. I'm Julia Carpenter for The Wall Street Journal. More than three-quarters of U.S. adults said they worry a great deal or a fair amount about Social Security. That's a 13-year high, according to a March Gallup poll. And when people are more fearful for Social Security's future, they're also likelier to claim their benefits earlier than expected, even if it means getting less income over the rest of their lives.

Financial advisors hear all the time people joking and saying, well, you know, if Social Security is there for me, then I guess I'll make X amount per month. It doesn't take a lot to get people anxious enough that they are ready to claim earlier than they might have originally planned because of concerns about the program. So what's in store for those who have decided to claim their benefits earlier? And how should someone decide when to do it, if ever? We'll talk with Wall Street Journal reporter Ann Turgison

about the future of Social Security and American retirement. That's after the break. We'll see you next time. Select markets, see the app for details. Staff cuts, claims of fraud, and Trump administration changes have made some Americans anxious about the future of Social Security. Some are even claiming their benefits earlier than planned. WSJ reporter Anne Turgison joins us. And there has always been this concern that Social Security could run out or go away entirely. What's happening now to further stoke that fear?

The program is not on the most solid financial ground. There's something called the Social Security Trust Fund. And because of the aging population, we don't have as many people paying into that as are taking money out. So in about eight years' time, the Social Security trustees are projecting that that trust fund will run out, which doesn't mean the program will go away at all. All it means is that the incoming tax revenue will only be enough to cover about 80% of the benefits. And then along comes Elon Musk and Doge. And there's been a lot of publicity in the news and on social media about the program targeting several thousand job cuts, reductions to the

ability to claim your benefits on the telephone. There's a lot of long lines, especially on the 800 number. It can take a few hours on average to get through. There's a lot of long lines, especially on the 800 number. It can take a few hours on average to get through. There is a turmoil within the program that is feeding into people's anxiety and concern and, in some cases, lack of trust of how the program is run that sometimes can follow long partisan lines. You spoke to some Americans who are taking the extra step of claiming their benefits earlier than planned. What's that process like?

And what do financial advisors say about it? So you can claim Social Security benefits, retirement benefits, anytime between age 62 and age 70. And for every month that you delay claiming, your benefit is increased by a certain amount. And so financial advisors often recommend that people, especially people who are likely to have decent longevity or couples have to think about the fact

that the surviving spouse will inherit the larger social security benefit. So it often makes sense for the higher earner and a couple also to delay as long as possible because that way you maximize your benefit. However, there's also evidence that shows that when the program is in the news in a negative way, people often will express a desire to claim earlier. Financial advisors hear all the time people joking and saying, well, you know, if Social Security is there for me, then I guess I'll make X amount per month. It doesn't take a lot to get people anxious enough that they are ready to claim earlier

than they might have originally planned because of concerns about the program. You spoke to one woman, Christine Banner, who claimed her benefits two years earlier than she had expected to or planned to. How did she come to that decision? She has a lot of anxiety about that program. President Trump has never said that he plans to cut benefits or that that is a target of his. However, he has also made a lot of claims about widespread fraud in the program. and the data doesn't really back that up. That can feed into some people's concerns that maybe there's like an agenda that isn't

being spoken. I can't say that that was specifically Christine's concern, but she does have a lot of anxiety about the program and its longevity and concern about benefit cuts. COLLEEN O'BRIEN And add on to that, that this is such an important time in people's lives and something they've been preparing for years that it could go away or it could change or your expectation could be different, it has to be really destabilizing. Yeah, they count on this income and in their case,

Christine's husband is already drawing his social security and he's got a pension. But their goal was to meet all of their monthly costs with both of their Social Security and his pension. So that income of hers, even though it is the smaller of the two benefits, is important for their plan. And they said, we really don't want to draw from our nest egg when the markets are down. So that was another thing that was pushing them in the direction of claiming sooner than they had planned to. Is the Social Security Administration concerned about people claiming their benefits early?

The Social Security Administration said that claims are up compared to a year ago and they say that people claiming early and people's anxiety is definitely a factor in that. They didn't quantify exactly how much of a factor it is. There are other factors at play that they mentioned, but that is something that they are concerned about. And just to clarify, Ann, if you wait longer to claim your benefits, you get a bigger monthly check, right? Yes, you do. Your benefit will be almost 80% higher at age 70 than it would be at 62. So with all of this anxiety and concern in the air, are people right to be fearful of Social Security's future? So I wouldn't ever tell somebody that they were wrong to be fearful or right to be fearful,

but Congress has a huge incentive to do something to fix this program. People who are on Social Security, retirees who receive it, older people, they tend to vote. Their Congress people are well aware of that. Back in the 80s, the last time we saw Congress having to step in and make some changes in order to shore up the program's finances, they did it. They did it even past the 11th hour, you know, where literally I was told that within a couple months people were going to have to take benefit cuts. But Congress came in and did it because they're no fools and they want to be reelected. So we may have to wait until the last minute to see a solution.

That's WSJ reporter Ann Turgeson. And that's it for your Money Briefing. This episode was produced by Zoe Kulkin with supervising producer Melanie Roy. I'm Julia Carpenter for The Wall Street Journal. Thanks for listening.