Millions of Americans are making a Social Security mistake that could cost them $100,000 or more in retirement income

What’s more, many Americans indicated they would cash in early amid concerns about the program’s future. In just seven years, Social Security will reach a fiscal cliff that could leave millions of American retirees with an $18,000 annual cut, according to a recent analysis by the Committee for a Responsible Federal Budget (CRFB). 

Key findings from the AARP report related to what Americans know about Social Security:

While most Americans (74%) believe they are informed about how Social Security works, few can correctly identify the optimal ages for claiming. Only 24% know that the earliest age to claim retirement benefits is 62, and just 19% identify age 70 as the point when monthly benefits are maximized—a figure that underscores substantial public confusion about optimal claiming strategies.

More than 80% of Americans say it is important to understand the best age to start benefits, but two-thirds did not know that waiting until age 70 yields the highest possible monthly payment.

This lack of knowledge has material consequences: by claiming before age 70, beneficiaries lock in permanently lower monthly payments. The report explicitly states, “most lack the knowledge necessary to make wise decisions about when to start receiving retirement payments.”

The deficit in understanding is especially pronounced among those under 50, but even among those 50+, 66% did not know the age for maximum benefits. This points to a systemic problem in retirement planning and public education.

The practical implication is that millions of Americans are inadvertently leaving money on the table by claiming benefits before age 70, often under the mistaken impression that earlier claiming is necessary or optimal.

The AARP 2025 survey shows evidence that a majority of Americans are unaware that delaying Social Security retirement benefits until age 70 maximizes their monthly income, leading many to lose out on substantial guaranteed retirement income because of uninformed choices.

What cashing in too early could cost, based on general averages:

Full Retirement Age (FRA): 67 (for those born in 1960 or later)

Monthly benefit at FRA: ~$1,800 (as of recent SSA data)

Claiming at 65: Results in ~86.7% of your FRA benefit, or ~$1,560/month

Claiming at 70: Results in 124% of your FRA benefit, or ~$2,232/month

Life expectancy: Around 85

Lifetime benefit comparison (from age claimed to age 85):

Claim at 65:$1,560/month × 240 months = $374,400

Claim at 70:$2,232/month × 180 months = $401,760

That’s a difference of $27,360, but…

Why the real loss may be higher:

If you live past 85, the higher monthly payment keeps adding up.

If you have a spouse, survivor benefits based on your record could also be reduced.

Cost-of-living adjustments (COLA) are applied to a higher base amount if you wait, compounding over time.

Summary:

Claiming at 65 means five years of earlier, lower benefits.

Waiting until 70 means delayed but higher benefits that are more advantageous long-term.

For an average American who lives a full retirement, claiming at 65 instead of 70 could easily mean losing $50K–$100K+ in total lifetime income.

For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.