Don’t necessarily rush to receive benefits.

Article published: June 12, 2024

You probably knew the Social Security program faced challenges, but you may not have known how soon these problems could become a reality.

The Social Security trust fund could be exhausted in 2035.  This means that either benefits would be cut or additional revenue will have to be raised from somewhere.


You may know that a payroll tax funds the Social Security program. The current Social Security tax rate is 6.2% paid by your employer and 6.2% that comes out of your paycheck on earnings of up to $168,600. Self-employed individuals must shoulder the entire 12.4% tax on their own.


Infographic highlighting 6.2% payroll tax paid by an employer and 6.2% payroll tax that comes out of an employees making more than $142,800. Self-employed individuals must pay the entire 12.4% tax on their own.


The less revenue collected by the Social Security Administration via the payroll tax, the more the SSA must rely on money from the Social Security trust fund to pay out benefits. 

What does this mean for you? When the Social Security trust fund is depleted, the government will rely strictly on the revenue from payroll taxes to pay out benefits. Currently, the Trustees say the program will be able to pay 79% of scheduled benefits – unless Congress acts to make up the shortfall. That means Social Security would only pay out 79 cents for every $1 of benefits.

Since it now looks like the Social Security trust fund could out of money in 10 years, unless Congress takes action, some people are wondering whether they should claim benefits as soon as they can. You can begin receiving benefits as early as age 62. But for every year you wait, your benefits increase, and you can earn delayed retirement credits of up to 8% each year from your Full Retirement Age to age 70. On that basis, it seems logical to wait until age 70. Only 10% begin their benefits at age 70 and 42% start taking their benefits between the ages of 62 and 65.



So, when is the best time to start receiving benefits? The answer depends on how long you will live. The crossover occurs at about age 80: By then, a person starting at age 70 will have cumulatively collected more from Social Security than someone who started at age 62.

That’s why we previously said that you should delay starting your benefits until age 70 if you plan to live beyond age 80. But with the pressures facing Social Security and the depleting trust fund you may be wondering what you need to do. Therefore, we can consider factors such as:

  • Age (and ages of married couples, including, importantly, the difference between their ages);
  • Income;
  • Work history;
  • Life expectancies;
  • Tax rates;
  • Projected investment returns; and
  • Survivor income needs.

After consiering all of this and your situation the guidance we often provide to you today is … the same as what we’ve been saying for the past 30+ years. In general, you should still delay starting your benefits until age 70 if you plan to live beyond age 80. However, regardless of what spreadsheets might reveal, remember that your personal factors, such as family health history, other income sources or anticipated future financial obligations, might outweigh the math.

It is important to have a conversation with your financial planner as they can provide an individualized guidance based on the holistic view of your financial situation. You can also ask them any additional questions or concerns you might have regarding the Social Security trust fund.


Decisions regarding Social Security are highly personal and depend on a number of factors such as your health and family longevity, whether you plan to work in retirement, whether you have other income sources as well as your anticipated future financial needs and obligations.