Taking Social Security at the earliest age you’re eligible might appear to be your best chance for grabbing your share, given how the date that payments will decrease under the current scenario keeps accelerating.
This year, the youngest baby boomers are hitting 62, which is the first year they can draw on the nation’s largest social safety net, and the news for Social Security’s continued soundness is concerning for Florida and its economy. The Sunshine State has more households dependent on Social Security than 47 other states and looming issues could reduce checks by about a quarter.
If the federal government maintains the status quo, Social Security will run out of money in 2033 to maintain its current level of support for retirees and survivors of deceased workers. That’s just seven years from now, according to the latest Social Security Trustees report published in 2025. In March, an official with the Congressional Budget Office (CBO) estimated that date is in 2032, according to testimony before the U.S. Senate Budget Committee.
Is Social Security running out of money?
Most Social Security payments go directly to retirees and survivors from what current workers are paying in taxes, through the Federal Insurance Contributions Act (FICA) or the Self-Employed Contributions Act (SECA). A percentage, however, comes from the Federal Old-Age Survivors Insurance Trust Fund. The fund was built up through the decades when incoming payroll taxes and interest earnings exceeded Social Security payments. Since 2010, though, Social Security’s program costs have exceeded the incoming tax revenues, requiring the trust fund to supplement the program’s costs.
Will Social Security payments decrease once the trust fund is depleted?
Keith Singer, a Boca Raton certified financial planner, predicts the nation’s leaders will stop the oncoming slash of retirees’ Social Security monthly checks, even if legislative efforts to do so have yet to advance, and recent legislation, such as the One Big Beautiful Bill Act, have increased the strain.
Singer predicts, however, politicians will act before the deadline hits and before current workers’ contributions become the sole source for an estimated 56 million retirees’ Social Security checks.
No politician, Singer says, would allow Social Security payments for retirees and survivors to drop by an average of 28% starting in 2033, as experts’ projections show under the current scenario. With the average monthly check at $2,071 this year, that would mean nearly the average Social Security retiree would see their income drop nearly $600 a month or $7,000 a year.
“The government owes that money — it’s not like a handout,” Singer said. “My opinion is that it would get funded somehow.”
The cut could be avoided if other government income goes to paying for the benefit, if the minimum age to collect Social Security is raised, or immigration increases the number of workers paying into the system, among other tweaks.
Assuming Singer’s prediction is correct, here’s what you might want to know about when and how you should plan to start collecting:
At what age can you collect 100% of your Social Security?
If you’ve been paying Social Security taxes for about 10 years or more, you can start receiving your Social Security retirement benefits as early as age 62. For those born after 1960, however, 67 years old is full retirement age and beginning to collect before then could mean Social Security payments will be as much as 30% less every month for you and 35% less for your spouse than those who waited until full retirement age.
For those of the age currently on the cusp of deciding when to collect, retiring at 70 would increase your payments beyond the amount you’d collect if you started drawing Social Security at 67. Your payments would be 124% of what you would have collected if you started at 67, according to the Social Security Administration.
But retiring at 71 won’t increase your payments more, however.
What should you consider when deciding when to start collecting Social Security?
Timing the commencement of your benefits to maximum advantage depends on a host of factors: life expectancy, marital status and employment conditions are the biggies.
For those born after 1960, retiring at 62 yields about 72.5% of what the beneficiary would have received waiting until the full retirement age to start collecting.
A person starting to collect Social Security at age 62 this year, earning $60,000 when they retire, would get $1,642 monthly, compared to the $2,347 monthly payment they’d start getting if she waited until 67. Wait until 70 and that payment will be $2,909 a month, according to the AARP Social Security calculator.
“If you have terminal cancer, it (the calculation) is different than if you are super healthy,” Singer said.
The spouse making more might want to keep working until 70, because the surviving spouse collects the larger of the couple’s Social Security checks.
A skilled investor collecting early might also want to take that $98,520 they can collect between age 62 and 67 before reaching full retirement age and investing it so that it would more than make up the difference that waiting for full retirement age would yield, Singer points out. But the difference is substantial: Not accounting for adjustments due to the cost of living increases, the person who waited until age 67 to retire would collect $84,600 more than the person who started collecting at 62 during the years between 67 and 77, for example.
Incentive for May-December marriages or embryo implantation?
Having a child at age 48 or older bumps up Social Security payouts. Children of Social Security beneficiaries who are unmarried and younger than 18 (or 19, if they are still in high school) are entitled to 50% of the parent’s full benefit amount. In some cases, the benefit is available to adopted children, stepchildren and grandchildren.
It also means children of one of the world’s richest men, Elon Musk, are in line for the bump. Reports are that Musk, now 54, welcomed a son last year.
Anne Geggis is statewide reporter for the USA TODAY NETWORK FLORIDA, reporting on health and senior issues. If you have news tips, please send them to ageggis@usatodayco.com. You can get all of Florida’s best content directly in your inbox each weekday by signing up for the free newsletter, Florida TODAY, at https://palmbeachpost.com/newsletters
This article originally appeared on Palm Beach Post: Social Security could face benefit cuts by 2032. Here’s what to do now
Reporting by Anne Geggis, USA TODAY NETWORK – Florida / Palm Beach Post
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