91% of Retirees Make a Social Security Mistake Costing up to $22,433 per year

Picture a 62-year-old who just retired from a job they were ready to leave. The Social Security statement says they can start collecting now, the mortgage is paid off, and a check arriving next month sounds awfully appealing. So they file. According to a National Bureau of Economic Research working paper, more than 90% of workers aged 45 to 62 would maximize their lifetime Social Security income by waiting until 70, yet only about 10% actually do. That means roughly 91% are leaving real money on the table. For a higher-earning worker, the gap between claiming at 62 and claiming at 70 can reach $22,433 per year for the rest of their life.

The instinct to grab benefits early is understandable. One retiree recently posted online asking whether there was “any meaningful reason” for his wife to delay past 62, since the money was right there and the future felt uncertain. Thousands of people ask that question every year, and the answer almost always comes down to one number: your claiming age.

Why the Claiming Age Decision Dwarfs Everything Else

Social Security gives you a permanent raise for every year you wait between 62 and 70. Claiming at 62 cuts your monthly check by roughly 30% from what you would receive at full retirement age. Wait past full retirement age, and the benefit grows by about 8% per year up to age 70. After 70, the increases stop entirely.

The most recent SSA benefit data, covering December 2025, shows the average 62-year-old beneficiary collecting $1,424 per month, while the average 70-year-old collects $2,275 per month. That is a difference of roughly $851 every month, or about $10,212 a year, for life. For workers closer to the taxable earnings maximum, that spread grows substantially. In 2026, the SSA’s maximum benefit at age 62 is $2,969 per month versus $5,181 at age 70, a gap of $2,212 per month.

The larger check also compounds over time. Social Security applies every annual cost-of-living adjustment to your starting benefit, so a bigger base means bigger dollar raises every year. With the Consumer Price Index sitting at 335.123 in May 2026 versus 308.417 in January 2024, COLA increases have been meaningful, and they deliver far more in absolute dollar terms to the retiree who started with the age-70 benefit than to the one who took the age-62 benefit.

The NBER paper, published in November 2022, put a dollar figure on the cost of claiming too early. For households headed by workers aged 45 to 62, failing to optimize Social Security claiming costs the median household $182,370 in lifetime discretionary spending. Correcting just that one decision would lift typical workers’ lifetime spending by about 10%.

How This Fits With the Rest of Your Retirement

Delaying Social Security only works if you have a way to cover expenses in the meantime. That usually means drawing down savings, working part-time, or some combination of both. The trade is straightforward: spend some of your IRA in your 60s in exchange for a much larger guaranteed, inflation-adjusted monthly check from the federal government starting at 70.

That trade looks especially compelling when you consider how stretched household budgets already are. The average American household spent $78,535 in 2024, according to the Bureau of Labor Statistics Consumer Expenditure Survey. At the same time, the personal savings rate has slipped to about 3.5%, down sharply from the elevated levels seen just a few years earlier. A bigger Social Security check is one of the few sources of guaranteed lifetime income that keeps pace with inflation, which makes it one of the most valuable assets a retiree can grow and one of the costliest to shrink for the sake of short-term convenience.

For married couples, the stakes climb higher still. When the higher-earning spouse delays, the survivor benefit also grows, protecting the spouse who lives longest. That single decision can be worth tens of thousands of dollars to a widowed partner in their 80s.

What to Think Through Before You File

Two things worth sitting with before you file:

1. The decision is essentially permanent. Once you claim, your monthly benefit locks in for life, adjusting only for inflation. There is no rewind button at 75 when you realize the check is too small.
2. Delaying is a longevity hedge. Retirees who claim early and deplete other savings in their 70s often find Social Security carrying most of the load in their 80s. The age-70 benefit is designed to land exactly when you need it most.

Health, marital status, and other income sources all change the math, so the right age for your neighbor may not be the right age for you. Run your own numbers through the Social Security Administration’s online calculators, and if the situation is complicated, an hour with a fee-only financial planner before you file is money well spent. A bad claiming decision costs you decades of reduced income, not just a few months.

Editor’s note: This article has been updated to reflect the latest SSA average benefit figures (December 2025 data showing $1,424/month at 62 and $2,275/month at 70), a revised personal savings rate of 3.5%, and context from the NBER working paper finding that suboptimal claiming costs the median household $182,370 in lifetime discretionary spending.

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