Older Americans are filing for Social Security benefits at a record rate this year, a surge that could reflect growing anxiety about the stability of the retirement system amid cutbacks under the Trump administration, experts say.
The number of people claiming Social Security jumped 17% to 1.8 million this year through May compared with the same period a year ago, according to the most recent data from the Social Security Administration. For the federal fiscal year, new filings are on track to reach 4 million, up 15% from the prior fiscal year, the Urban Institute said in a new analysis of claims data.
The spike in early benefits claims comes as the Trump administration has slashed jobs and made other changes at the Social Security Administration, an agency already struggling to provide services to the nearly 70 million retirees, disabled people and survivors of deceased workers who rely on the program.
These developments are likely prompting the surge in new filings, as well as an increase in calls and in-person visits to Social Security offices since January, the Urban Institute said.
Although Mr. Trump has vowed not to touch Social Security, his administration is has cut the agency’s staffing to 50,000 workers, down from its current level of about 57,000 workers. The agency’s workforce has been shrinking for years, with the AARP noting that the Social Security Administration had 63,000 workers in 2015.
Even as its workforce shrinks, the Social Security Administration is serving more people, with the number of beneficiaries rising 19% from about 59 million people in 2015 to about 70 million today, its data shows.
“I have attended several town halls around the country, and many people have asked if they should claim benefits early given Trump and [Elon] Musk’s interference in the system,” Max Richtman, president of the National Committee to Preserve Social Security and Medicare, an advocacy group for the two retirement programs, told CBS MoneyWatch.
He added, “People are scared, and they’re not sure what to do.”
To be sure, Americans have long held concerns about the stability of the Social Security system. Because the agency is paying out more in benefits than it’s taking in through payroll taxes due to the nation’s aging demographics, the program is currently dipping into its trust fund to pay beneficiaries.
Without changes to the program, the trust fund is slated to be depleted in 2035, which will trigger a benefits cut of about 20%, the agency has forecast.
An aging society
Other factors could be driving the increase in early Social Security filings, the Urban Institute said. For one, the baby boomer generation is hitting “peak 65” as a record number of people hit retirement age, although that demographic shift isn’t enough to entirely explain this year’s surge in claims, the think tank noted.
Another cause could be the Social Security Fairness Act, which provides more retirement benefits to public servants such as teachers, firefighters and police officers, and could encourage more people to file, the Urban analysis said.
The Social Security Administration didn’t respond to a request for comment.
Frank Bisignano, the agency’s new commissioner, told CBS News last month that the program will be able to provide services to beneficiaries despite the staffing cuts “through technology and process engineering.”
He added, “Everybody is committed to Social Security for the rest of time.”
The downside to claiming early
The agency is receiving more early claims from higher-income Americans, especially at age 62, which is the earliest age at which a worker can start receiving their monthly Social Security benefits, the Urban Institute said.
But there’s a major cost to claiming at 62. While it might seem prudent to claim early if you’re worried Social Security won’t be around in a few years — something that experts say is extremely unlikely — the tradeoff is a permanently lower monthly benefit.
People who claim Social Security benefits at 62 receive about 30% less in their monthly checks than if they wait until they turn 67, which is currently the program’s full retirement age. Older Americans can collect even greater benefits if they delay filing past their full retirement age, getting an extra 24% boost to their monthly check if they wait until they turn 70.
Because of that math, Richtman said his group recommends holding off on claiming, even though people might be fearful about the program’s health.
“Their concern is understandable. But we advise workers not to claim early out of fear, because filing for Social Security before full retirement age results in a lifetime reduction in benefits,” he said.
