Should You Claim Social Security at 62 or Wait Until 67?

So a mentee asked this question. I'm not an expert, but I gave him my opinion.

If you're turning 53 in 2025, you'll be eligible for Social Security at age 62 in 2034. You have a choice: claim 70% of your full benefit at age 62 or wait until 67 to receive 100% of the scheduled benefit. On the surface, waiting looks like more money—but when you factor in the time value of money, system risk, and break-even math, early claiming may be the smarter choice.

And we live in a world of AI, I entered what I wrote:

Given all that, I did my best to explain it—and hopefully I made some sense. I’m not a financial advisor, CFP, or wealth manager. Then again, I still remember when some of the so-called experts at the bank advised employees not pay off student loans and invest the money instead or use it. A few years later, many people looked back and said that was bad advice. So, yes—even financial professionals can get it wrong. I read and heard financial experts say wait to you're 67 or 70 for retirement. Hmm.

Why Claim at 62?

1. Time Value of Money

• A dollar today is worth more than a dollar later. (Learned during my Finance 350 course at SFSU)

• Claiming at 62 gives you 5 extra years of income that can be invested or used during your more active years.

2. Social Security Solvency Risk

• The SSA projects a funding shortfall in 2035.

• If Congress doesn’t act, benefits may be cut to 83% of what's promised. [ see: Tyler, P.B. (2025) Social Security may turn insolvent due to financial cliff. how will benefits be affected?, The Times. Available at: https://www.shreveporttimes.com/story/news/2025/02/27/how-will-retirees-be-impacted-by-social-security-financial-shortfall-funding-benefit-payment-cuts/80714723007/ (Accessed: 25 May 2025). ]

• So “Full Retirement” at 67 might really mean only 83%, not 100%.

3. Break-Even Math:

• If you don’t expect to live past 79, taking benefits at 62 yields more.

• If you believe the 83% cut will happen, you’d need to live to 94 for waiting to pay off.

4. Inflation Reduces Delayed Value

• At 3–5% inflation, waiting for a "bigger check" may not increase your real purchasing power.

5. Certainty & Quality of Life

• Claiming early gives you control and lets you use the money while you're more active.

• Health and longevity are uncertain—better to enjoy benefits sooner than risk missing them later. If you do retire at 62, you'll need to bridge healthcare until Medicare at 65 (if that's still around).

• If you're very healthy and expect to live past 90, waiting may make sense. Then you're betting on Congress.

6. Changing Times

• If Congress acts earlier, then maybe this scenario changes.

• Your circumstances may change

• And it all depends, can you tighten your belt to take a 30% cut as well.

And, here's AI's analysis of what I wrote: https://poe.com/s/ZJCgWS6aDYMjEd93NcHR

These days, I use AI to challenge my thinking—or at least try to prove me wrong. Or maybe just to tell me I’m mad.. in this mad, mad world. [ reminds me, if you haven't watched Kramer's It’s a Mad, Mad, Mad, Mad World (1963) - you should - and this clip version agrees what I say "doesn't make any difference." https://www.youtube.com/watch?v=nTFIIT2XC4g )