Most Americans significantly underestimate the amount they lose when they claim Social Security retirement benefits before the age of 70, according to the 2025 AARP 90th Anniversary Survey, which reveals widespread knowledge gaps about benefit optimization.
Furthermore, many Americans indicated that they would cash in early, citing concerns about the program’s future.
According to a recent analysis by the Committee for a Responsible Federal Budget (CRFB), Social Security will reach a fiscal cliff in just seven years, potentially causing millions of American retirees to lose $18,000 per year.
Key findings from the AARP report regarding what Americans know about Social Security:
While most Americans (74%) believe they are informed about how Social Security works, few can correctly identify the optimal ages for claiming. Only 24% know that the earliest age to claim retirement benefits is 62, and just 19% identify age 70 as the point when monthly benefits are maximized—a figure that underscores substantial public confusion about optimal claiming strategies.
More than 80% of Americans say it is important to understand the best age to start benefits, but two-thirds did not know that waiting until age 70 yields the highest possible monthly payment.
This lack of knowledge has material consequences: by claiming before age 70, beneficiaries lock in permanently lower monthly payments. The report explicitly states, “most lack the knowledge necessary to make wise decisions about when to start receiving retirement payments.”
The deficit in understanding is especially pronounced among those under 50, but even among those 50+, 66% did not know the age for maximum benefits. This points to a systemic problem in retirement planning and public education.
The practical implication is that millions of Americans are inadvertently leaving money on the table by claiming benefits before age 70, often under the mistaken impression that earlier claiming is necessary or optimal.
According to the AARP 2025 survey, the majority of Americans are unaware that delaying Social Security retirement benefits until age 70 maximizes their monthly income, causing many to miss out on significant guaranteed retirement income due to uninformed decisions.
What cashing in too early could cost, based on general averages:
Full Retirement Age (FRA): 67 (for those born in 1960 or later)
Monthly benefit at FRA: ~$1,800 (as of recent SSA data)
Claiming at 65: Results in ~86.7% of your FRA benefit, or ~$1,560/month
Claiming at 70: Results in 124% of your FRA benefit, or ~$2,232/month
Life expectancy: Around 85
Lifetime benefit comparison (from age claimed to age 85):
Claim at 65:
$1,560/month × 240 months = $374,400
Claim at 70:
$2,232/month × 180 months = $401,760
That’s a difference of $27,360, but…
Why the real loss may be higher:
If you live past 85, the higher monthly payment keeps adding up.
If you have a spouse, survivor benefits based on your record could also be reduced.
Cost-of-living adjustments (COLA) are applied to a higher base amount if you wait, compounding over time.
Summary:
Claiming at 65 means five years of earlier, lower benefits.
Waiting until 70 means delayed but higher benefits that are more advantageous long-term.
For an average American who lives a full retirement, claiming at 65 instead of 70 could easily mean losing $50K–$100K+ in total lifetime income.
