The morning after his 67th birthday, Marty McGowan filed for Social Security. That wasn’t his original plan. He had intended to wait until he was 70 to claim benefits, in exchange for a heftier payment that would have yielded an extra $800 a month.
But like other retirees in recent months, he was watching the Trump administration’s shake-up at the Social Security Administration during a time when the broader economic outlook appeared increasingly uncertain.
Concerns about the economy and access to benefits nudged him to file earlier than he had anticipated, even if it might cost him over the long run.
He wasn’t the only one: An additional 276,000 retirees claimed benefits on their earnings record this fiscal year through April, according to the Urban Institute, a research group, a 13 percent jump from the same period a year ago. Officials inside the Social Security Administration called the rise “dramatic,” and though there were some other reasons for the surge, program experts say anxiety appeared to play a meaningful role.
“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.”
The Trump administration’s crusade to diminish the federal bureaucracy did not spare Social Security, which rattled insiders at the agency and Americans close to or in retirement. Many of them feared that job cuts and other policy changes could threaten their access to benefits, causing them to jam phone lines and overwhelm offices. Elon Musk, the tech billionaire whose Department of Government Efficiency drove many of the changes, continued to spread false claims about widespread fraud at the agency, which only added to the confusion.
That situation, coupled with wider economic uncertainty, seemed to influence some retirees’ real-world financial decision-making. Agency officials acknowledged this during their recent operational meetings, along with other strains on the system.
“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 agency’s acting commissioner, during a March 28 meeting that was posted on YouTube.
“Yes,” another agency official replied. “You’re exactly right.”
At another meeting on April 25, agency staffers said higher earners were claiming at earlier ages than they had in the past, which program experts say could explain some of the fear-driven filers.
But there were other reasons, too. After receiving a regular notice from the agency, about 50,000 retirees filed for higher benefits on their own earnings record, to replace the lower spousal payments they were already receiving. (This elicited a greater response than usual because the agency was able to identify more eligible people.) The continuous tide of baby boomers surely contributed to the increase as well, but program experts said the expected growth couldn’t explain all of the extra filers.
Filing sooner rather than later can have broad implications, not only for the worker, but also for others who may receive benefits on their earnings record, including their spouse.
Workers become eligible for retirement benefits at age 62, and some cash-constrained beneficiaries have little choice but to collect as soon as they can.
But there can be a huge payoff for those who can afford to wait: Taking benefits at 62 instead of 67, for example, generally results in a lifetime payment that’s 30 percent lower. (Age 67 is the “full retirement age,” or the age at which you can collect your full benefit amount, for those born in 1960 or later.)
And for each year a retiree delays after their full retirement age, the monthly benefit amount rises 8 percent until age 70.
Beneficiaries who consider delaying benefits tend to focus on the age at which they would “break even.” That’s the point at which waiting to take a higher payment later begins to exceed taking the lower payment earlier.
But economists and financial planners urge people to look at Social Security as longevity insurance: Waiting to take a higher benefit will pay off if you live a longer life, particularly if you run the risk of outliving your savings. In fact, when you compare the cost of delaying Social Security — money you forgo collecting — with the cost of buying an annuity in the commercial market, it’s hard to find a better deal.
“You can’t buy an inflation-indexed annuity anywhere comparable on price in the private sector than you can by just delaying your benefit,” Mr. Smalligan said.
For Mr. McGowan, a former assistant director in the information technology department at Wake Forest University, there were a few reasons that pushed him to file earlier than he had initially hoped. He and his wife, Lynn, decided to retire in 2022, after working at home during the pandemic and then being called back to the office. They planned to draw down their retirement savings, and file for Social Security at 70.
But Mr. McGowan began to lose confidence earlier this year. DOGE was planning major changes for the S.S.A., and the fact that Mr. Musk called the program a Ponzi scheme was troubling, he said. Then President Trump’s unpredictable policy-making began to take a toll — on the economic outlook, the markets and, ultimately, his retirement portfolio. After Mr. Trump introduced his aggressive tariff plan last month, the value of Mr. McGowan’s investments plunged by roughly $30,000, though the markets have recovered since then.
“The market drop was the final straw,” he said.
The couple decided to hedge their bets. “We figured one of us ought to start withdrawing Social Security,” he added. As for his wife, who is 66, “she is going to try to ride it out a little bit longer.”
The spike in claims puts the agency on track to receive nearly four million claims for retirement benefits in the 2025 fiscal year, up 15 percent from 2024, according to the Urban Institute. That’s five times the average increase of 3 percent annually over the past 12 years, the institute said.
There were 614,158 pending retirement, survivor and health insurance claims as of April, up from 460,158 the same month last year, according to an agency presentation on April 25. The Social Security Administration did not respond to inquiries for comment.
As for Mr. McGowan, he was pleasantly surprised by how smoothly the claiming process went. Once he filed online, his benefits began flowing just 12 days later.
Tara Siegel Bernard writes about personal finance for The Times, from saving for college to paying for retirement and everything in between.
The post Why Are So Many Retirees Filing for Social Security Earlier? appeared first on New York Times.
