Longevity Risk: Many people underestimate their lifespan and claim benefits early, fearing they might not live long enough to enjoy their benefits otherwise.
Cost-of-Living Adjustments (COLA): Social Security benefits are subject to annual COLAs, which are designed to keep up with inflation.
Impact on Spousal Benefits: The decision to claim early can also negatively impact the benefits available to a spouse.
Permanent Reduction in Benefits: Claiming Social Security before reaching FRA results in a reduction of benefits that can be as much as 30% less than if they had waited until FRA.
Tax Implications: Social Security benefits may be taxable depending on one's income level.
Given these factors, financial advisors often recommend delaying Social Security benefits until at least the FRA or even until age 70
when benefits reach their maximum through delayed retirement credits. This strategy can significantly increase the lifetime income from Social Security