FEARS over the future of Social Security are pushing Americans to claim their benefits earlier than ever.
New Social Security filings are up more than 15% in March compared to the same time last year.
1
More than 580,000 Americans filed new Social Security claims last month, as uncertainty swirls around the stability of the retirement program.
This represents an uptick of about 500,000 from March 2024.
At a March 28 internal meeting, a Social Security Administration (SSA) employee confirmed the uptick and said it defied seasonal expectations.
“The spike in new Social Security claims last month was unusual because they typically drop slightly at the beginning of the year,” the employee said.
READ MORE ON SOCIAL SECURITY
WHAT’S HAPPENING?
Many Americans appear to be staking their claim early on payments worth up to $5,108 before it’s too late.
“So what you’re telling me is that… fearmongering has driven people to claim benefits earlier, because they’re afraid they’re not going to claim benefits at all?” acting Social Security commissioner Lee Dudek asked at the meeting.
“Yes. You’re exactly right. That is what’s happening,” replied the staffer.
Field offices have reportedly been overwhelmed with concerned visitors, some asking for documents they could easily access online.
“Why are they coming? They’re nervous,” one employee said.
“I think we have a lot of customers that, right now… are very uneasy,” added Dudek.
SOCIAL SECURITY SHAKEUP
The panic stems in part from recent changes at the SSA under the newly formed Department of Government Efficiency, or DOGE, led by Elon Musk.
DOGE has cut 7,000 jobs – over 12% of the SSA workforce – and implemented new policies and tech systems that have caused outages and confusion.
Call centers are overwhelmed, and long lines at field offices are becoming the norm.
Meanwhile, Musk and Donald Trump have publicly accused the program of attracting illegal immigration and being riddled with fraud, despite offering no evidence.
HOW TO SUPPLEMENT YOUR SOCIAL SECURITY
Here’s how to supplement your Social Security:
Given the uncertainty surrounding Social Security’s long-term future, it’s essential for workers to consider ways to supplement their retirement income.
Senior Citizens League executive director, Shannon Benton recommends starting early with savings and investing in retirement accounts like 401(k)s or IRAs.
- 401(k) Plans
- A 401(k) is a retirement account offered through employers, where contributions are tax-deferred.
- Many employers also match employee contributions, typically between 2% and 4% of salary, making it a valuable tool for building retirement savings.
- Maxing out your 401(k) contributions, especially if your employer offers a match, should be a priority.
- IRAs
- An Individual Retirement Account (IRA) offers another avenue for retirement savings.
- Unlike a 401(k), an IRA isn’t tied to your employer, giving you more flexibility in your investment choices.
- Contributions to traditional IRAs are tax-deductible, and the funds grow tax-free until they are withdrawn, at which point they are taxed as income.
“Many Americans are rightly alarmed by the chaos that Elon Musk and Donald Trump have manufactured at the Social Security Administration,” said Nancy Altman, president of the advocacy group Social Security Works.
“The correct response is not to claim benefits before you’re ready, but to contact your members of Congress and make sure they do their jobs, including conducting oversight so that benefits are not disrupted.”
THE FUTURE OF SSA
More than 75% of American adults say they are very worried about Social Security’s future, according to a recent Gallup poll.
The program’s trust fund is projected to run short of cash by 2035 if no reforms are made.
Some of the recent surge in claims may also be attributed to demographics.
A growing number of baby boomers are reaching retirement age, and the recently signed Social Security Fairness Act has prompted more public workers to file.
Still, financial experts caution against rushing to claim benefits too early.
EXPERT OPINION
“Every year you delay taking a Social Security payment after full retirement age you receive a significant increase in payments up to the age of 70,” said economist Laurence Kotlikoff.
According to Kotlikoff, someone who delays benefits until age 70 instead of 62 would receive checks 76% higher, and come out ahead financially if they live past 80.
“Social Security payments are not tied to the stock market like a 401(k) or many Roth IRAs,” said retirement adviser Chris Orestis.
“Having a steady check each month can help offset the turbulence in financial markets.”
Despite these long-term benefits, fear remains a powerful motivator. And for now, many Americans seem willing to sacrifice future gains for the peace of mind that comes with claiming a check while it’s still there.