US Retirees are Claiming Social Security in Record Numbers Amid Threats to Benefits Continuity

Anxiety over the continuity of Social Security benefits due to the Trump Administration's large-scale changes at the Social Security Administration (SSA) in the past months is driving more people to claim their benefits earlier than planned.

Poor economic outlook, elevated inflation, doubts over access to benefits, recession fears, and volatility across 401(k) portfolios in the recent tariff-induced market crash are leading retirees to tap into Social Security benefits earlier than planned, even if it costs them hundreds of dollars in monthly payments over the long run.

According to data compiled by the Urban Institute, an additional 276,000 retirees claimed Social Security benefits in the current fiscal year through April. The surge represents a 13% year-over-year increase, which SSA officials described as a 'dramatic' rise.

'It is worrisome because for most people, claiming early is not a good decision,' said Jack Smalligan, a senior policy fellow at the Urban Institute. 'They're nervous about the threats to the Social Security Administration and their benefits while simultaneously looking at their 401(k), if they have one, and worrying about that.'

Fear Mongering Driving Early Social Security Claims

Massive workforce downsizing and policy changes at the SSA, led by Elon Musk's US Department of Government Efficiency, on allegations of widespread fraud at the agency, influenced many retirees to settle for a lower monthly Social Security income for life.

'Fear mongering has driven people to claim benefits earlier because they're afraid they're not going to claim benefits at all,' said Leland Dudek, then the SSA's acting commissioner, during a late March meeting. Furthermore, SSA officials highlighted in an April meeting that higher earners were claiming benefits earlier than in the past.

Workers can claim benefits at age 62, but the monthly income can be as low as 30% compared with those claiming at the full retirement age of 67. The monthly benefit increases 8% each year a retiree delays claims after full retirement age until age 70.

Workers delaying claiming benefits generally think about the age at which they would 'break even,' but economists recommend that people view Social Security as longevity insurance.

'You can't buy an inflation-indexed annuity anywhere comparable in price in the private sector than you can by just delaying your benefit,' Smalligan said.

SSA Expecting 4M Claim Applications This Year

The claims surge could mean the SSA could receive almost four million claim applications for retirement benefits in 2025, a 15% year-over-year increase or five times the average increase of 3% annually over the past 12 years, according to the Urban Institute.

As of April, there were over 600,000 pending retirement, survivor and health insurance claims compared with 460,158 in the same period of 2024, according to an SSA presentation in April.

In April, the average Social Security monthly benefit across all beneficiary types was £1,372.81 ($1,855.57). The average monthly benefit for retired workers was £1,479.65 ($1,999.97).

Social Security income is further affected by taxes, as the SSA estimates that 40% of beneficiaries pay taxes on their benefits. For instance, if you file federal tax returns as an 'individual' and your combined income is between £18,498 ($25,000) and £25,158 ($34,000), you could end up paying taxes on up to 50% of total Social Security benefits. A combined income over $34,000 means up to 85% of your Social Security benefits could be subject to income tax.