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According to some lawmakers, language around Social Security has been steering Americans wrong for decades, and the price of that misinformation could be very high. Some retirees may have lost out on hundreds of thousands of dollars due to the confusion caused by inaccurate labeling.
Now, those lawmakers are taking steps to fix that with new legislation.
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The bipartisan Claiming Age Clarity Act (1) — which is designed to help Americans understand how their monthly retirement benefits are impacted by the age at which they claim Social Security — has already passed Congress and the Senate, and is currently waiting (2) on President Donald Trump’s signature to become law.
In the meantime, Sen. Bill Cassidy from Louisiana is stressing the need to rectify the issue, telling Fox News (3), “We’ve got to fix Social Security both for the individual receiving it and for the taxpayer who funds it. One way is to not mislead people.”
Cassidy says that the Social Security’ Administration’s current language about when to claim benefits gives people the wrong impression. It does this, for example, by referring to claiming Social Security at 62 as claiming at the “early eligibility age (4).”
“The way it was presented to folks is that you could take money early, but it wasn’t communicated to them that if you wait until you’re 65, you get more than if you start receiving at 62,” Cassidy told Fox News. “If you wait until you’re 70, you get a lot more.”
Although Social Security claiming ages have been gradually shifting (5), with more retirees claiming at a later age over time, just over a quarter of retirees still started collecting benefits at the earliest available age of 62 between 2019 and 2023.
Depending on their full retirement age, the reduction in their standard benefit could be as high as 30% (6).
Lawmakers are hoping to convince people to claim later by altering the terms used to describe Social Security claiming ages. The goal of the change is to more clearly portray what the choice to claim at each age means.
“We’re changing that nomenclature so people know that if we wait longer, we get more over a lifetime. It’s smart for me financially to wait longer,” said Cassidy.
If the bill turns into law, claiming at 62 will be described (7) as starting at the “minimum monthly benefit age,” while a claim at full retirement age will be called the “standard monthly benefit age,” and a claim at 70 will be referred to as the “maximum monthly benefit age.”
The intention is that the new names will more clearly signify that an early claim at 62 results in a reduction, while a claim at 70 could be as much as 24% higher than the standard benefit due to delayed retirement credits.
If Americans are persuaded by the change, the impact could be significant, as one study has revealed that the median loss resulting from suboptimal early claiming could be as much as $182,370 in household lifetime discretionary spending (8).
The fact remains that even with a late claim, Social Security benefits replace only 40% of annual pre-retirement income (9) on average, meaning that most retirees likely won’t be able to support themselves if they rely entirely on those benefits.
That’s why it’s important to seek out additional supplementary income so that you can maximize your chances of having financial security during your golden years. Here are a few ways of doing it.
Build a diversified portfolio
Your retirement fund should already provide some income to supplement Social Security, but you can always take steps to try to make it as inflation-proof as possible. Adding an asset like gold to your portfolio could help you hedge your investments against inflation even during tough economic times.
Gold has long been seen as an inflation-hedging asset, for one very good reason: Unlike fiat currencies, the precious yellow metal can’t be created out of thin air or printed at will by central banks. This inherently limited supply can help it store value in the face of inflation.
Gold is also considered the ultimate safe haven. Since it’s not tied to any one country, currency or economy, investors often flock to it in times of economic uncertainty or geopolitical instability — driving prices higher.
If you’re looking for a way to add gold to your retirement portfolio, opening a gold IRA with the help of Goldco allows you to benefit from this inflation-hedging asset while still taking advantage of the generous tax breaks that IRAs offer.
With a minimum purchase of just $10,000, you can invest in gold and other precious metals in physical forms. Plus, Goldco offers free shipping and access to a library of retirement resources, and they’ll even match up to 10% of qualified purchases in free silver.
If you’re interested in learning more about adding gold to your portfolio, you can download your free gold and silver information guide today.
Claim discounts and find savings opportunities
As you get closer to retirement, every dollar starts to matter more. Rising healthcare costs, uncertain markets and fixed incomes can make it harder to stretch your savings — especially if you’re trying to plan for decades ahead.
Joining an organization like AARP can help retirees make those dollars go further, as it offers member discounts on almost everything they need, from entertainment and travel to prescriptions and dental care.
AARP has long been a trusted resource for retirees, providing helpful guides and advice to enable them to make more informed financial decisions. Its members can take advantage of these guides to make the most of Social Security, choose the right Medicare plan and uncover other government benefits — potentially saving thousands.
Sign up with AARP today and get 25% off your first year.
Work with a financial professional
For those who already have a sizable retirement portfolio, financial decisions can become increasingly nuanced. Managing withdrawals, minimizing tax exposure and ensuring long-term sustainability often require greater coordination and strategic planning.
In these cases, working with a financial advisor can help reduce costly mistakes.
For example, if you have a portfolio of $250,000 or more, platforms like WiserAdvisor can connect you with vetted professionals who specialize in this kind of planning.
Simply answer a few questions about your savings, retirement timeline and overall investment portfolio. From there, WiserAdvisor reviews its network to match you — for free — with up to three vetted, reputable advisors aligned with your specific needs.
You can then schedule no-obligation consultations with your matches to determine who is the best fit for your long-term goals.
WiserAdvisor is a matching service and does not provide financial advice directly. All matched advisors are third parties, and specific financial results are not guaranteed.
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Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.
Congress.gov (1); CNBC (2); Fox News (3); Social Security Administration (4), (6), (9); Center for Retirement Research (5); Smucker.house.gov (7); National Bureau of Economic Research (8)
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
