3 ways to avoid dipping into Social Security early

CBS News

25-07-2025

For many Americans, Social Security is a financial lifeline during retirement, but it's also one that pays out higher amounts if you can wait longer to claim it. Yet despite this built-in incentive, a surprising number of people still file early. According to recent data, more Americans are now claiming Social Security benefits at age 62, the earliest possible age, a decision that can lock in significantly smaller monthly checks for life. Case in point? Your monthly payments increase by about 8% for every year you delay benefits past your full retirement age until age 70.
That type of guaranteed return is hard to beat, especially in today's market, so why do people claim their Social Security benefits early? In many cases, it's out of necessity. Things like job loss, rising living costs or unexpected emergencies can push retirees-to-be into relying on Social Security sooner than they'd planned, especially if they're behind on their retirement savings and investing goals. And in today's uncertain economic climate, with inflation remaining sticky and housing costs still high, those types of pressures aren't letting up.
However, there are ways you can reduce the chances of needing to dip into Social Security earlier than planned. By using these tools, you can buy yourself more time and lock in a larger monthly benefit down the road.
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The following strategies could help you avoid the early Social Security filing trap.
One of the most effective ways to bridge the income gap before claiming Social Security is investing in an immediate or deferred income annuity. Think of an annuity as creating your own personal pension. When buying one, you make either a lump sum payment or series of payments to an insurance company, and in return, they guarantee you monthly income for life or a specified period.
The beauty of this strategy lies in timing and tax efficiency. If you purchase a deferred annuity in your early 60s, you can set it to begin payments at age 65 or 67, creating a bridge until you're ready to claim Social Security at 70. This approach is particularly powerful because annuity payments are partially tax-free, as you're getting back some of your own principal. And, delaying Social Security means your eventual benefits will be significantly higher and potentially push you into a lower tax bracket overall.
Note, though, that annuities can differ vastly from one option to the next, so it's important to do your research and choose the type and payout structure that aligns with your timeline, risk tolerance and other retirement income sources. Working with a financial advisor or annuity expert who understands the nuances of annuity products can help you find the right option to support your Social Security strategy.
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If you're a homeowner aged 62 or older who has a substantial amount of home equity, a reverse mortgage could give you the financial breathing room you need to delay tapping your Social Security benefits. With a reverse mortgage, you borrow against the equity you've built in your home and receive the funds as a lump sum, monthly payments, a line of credit or a combination of these options. Taking out a line of credit via a reverse mortgage is often most strategic because unused credit actually grows over time, giving you an expanding financial safety net.
And, unlike traditional home equity loans, your reverse mortgage loan proceeds don't have to be repaid until you sell the home, move out or die. There are also federal protections in place so you'll never owe more than the home is worth, even if the market shifts. So, when used strategically, a reverse mortgage can be an efficient way to lock down a retirement income source, especially if your home has appreciated in value and you want to stay in place.
That said, reverse mortgages aren't the right solution for everyone. They come with fees, reduce your home equity and can complicate things for your heirs. But for retirees who want to stay in their homes and avoid filing for Social Security before they're eligible for the maximum benefits, they're worth considering, particularly as home prices stay high or continue to climb in many markets.
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If you're 50 or older, you can make catch-up contributions that significantly boost your retirement savings. The strategy involves front-loading these accounts in your late 50s and early 60s, and then using systematic withdrawals to fund your lifestyle while your Social Security benefits grow. While maximizing contributions to 401(k)s, IRAs, and health savings accounts (HSAs) in your final working years requires advanced planning, it can be incredibly powerful, as you can use these funds strategically in early retirement.
For example, you might withdraw from traditional IRAs and 401(k)s first while paying ordinary income tax and then transition to Roth accounts before finally claiming maximized Social Security benefits. This creates a tax-efficient withdrawal sequence that can extend your money significantly.
For 2025, you can contribute up to $31,000 to a 401(k) and $8,000 to an IRA when including catch-up contributions at or after age 50. HSAs are particularly valuable because they're triple tax-advantaged and can be used for any purpose after age 65, though it's worth noting that non-medical withdrawals are taxed as ordinary income.
Delaying Social Security isn't always easy, and while it may be tempting to claim Social Security as soon as you're eligible, especially when money is tight or retirement feels just out of reach, doing so often means settling for smaller monthly checks that can stretch thin over time. Fortunately, with some smart planning, you can give yourself the flexibility to wait, whether that means investing in the right annuity, tapping into home equity through a reverse mortgage or focusing heavily on your tax-advantaged retirement accounts. By utilizing one or more of these strategies, you'll be in a stronger position to make the most of your benefits and your retirement.