Most Retirees Skip This Crucial Social Security Step, Putting Their Housing Stability at Risk

With the government shutdown dragging on, many seniors are concerned about receiving their Social Security check. 

But despite thousands of SSA employees being furloughed, Social Security and SSI payments will continue with no change in payment dates. Money for the benefit programs is considered mandatory spending by law, meaning its budget is not dependent on yearly congressional approval, according to the SSA. 

This is surely a bit of good news for retirees, since transitioning to a fixed income can be challenging on its own. That’s why understanding Social Security benefits is crucial, as it can significantly affect how much money you will get or lose.

This is particularly important for retirees who are homeowners, as failing to understand certain steps can threaten their long-term housing stability.

For example, a new study from Schroders found that 9 in 10 working Americans say they plan to claim Social Security before age 70, even though waiting until 70 can significantly increase their monthly income for life.

“While it is true that the numbers don’t lie, and the numbers tell seniors that it will be worth it to wait, they likely aren’t doing the math. The data shows a lot of them are primarily concerned about making ends meet now,” says Bobbi Rebell, CFP, consumer finance expert at CardRates.com.

Why retirees are claiming early despite the math

In addition to finding that only 10% of adults plan to wait until age 70 to claim their benefits, the Schroders survey also found that 44% of non-retirees plan to file for Social Security benefits before 67, “the full retirement age for everyone born in 1960 or later.”

Interestingly, this is a deliberate decision for most non-retired Americans, as a whopping 70% of them say they understand that waiting would increase their monthly payments.

The main reason cited for not waiting until age 70 is that survey respondents want to access the money as soon as possible. Others said they feared the program will become insolvent or that they will need the money for regular income.

Steve Sexton, CEO of Sexton Advisory Group, says that in his 20 years of working with retirees, he has seen many people claim Social Security early out of fear and uncertainty rather than strategy.

“While we consistently hear about Social Security running out of money, we're more likely to see a change in benefits over complete insolvency,” he says, adding that another major driver is the immediate need for income—particularly for those facing economic hardship, retiring without sufficient savings, or facing expensive health issues that require care and/or make it difficult to keep working.

Finally, he says another major factor is misunderstanding how Social Security works.

“Many Americans simply don't realize how much claiming early can reduce their lifetime benefit, or how waiting can compound guaranteed income. For these Americans, Social Security benefits are seen as a switch to flip on at retirement, not as an effective income strategy that can empower their long-term financial security,” he adds.

How much waiting really pays off

The age at which you start claiming Social Security benefits can make an enormous difference.

As the Social Security Administration (SSA) notes: “If you start receiving benefits early, your benefits will be reduced a small percentage for each month before your full retirement age.”

Age 62 is early eligibility, age 67 is the full retirement age (FRA), and age 70 is when you get the maximum benefit.

As Sexton explains, if you claim at 62, you'll see roughly a 30% reduction in your benefit for life. Meanwhile, waiting until FRA gives you 100% of your earned benefit and delaying until 70 allows your benefit to grow about 8% per year past FRA.

“That's like getting an 8% annual raise simply for waiting, so if you're in a position to hold off on claiming your Social Security benefit, you'll be in a more favorable position in your golden years,” he adds.

On the other hand, claiming Social Security early reveals pretty dramatic numbers.

If someone eligible for $2,000 at age 67 took it early, they are looking at about $1,400 a month, effectively forfeiting $600 a month forever, says Rebell.

“However, it gets more painful when you look at the approximately $2,500 they would get if they can hold out to age 70,” she adds.

As she further notes, that $1,100 a month difference may be what keeps someone from having to move out of their home or downsize, or stay in their home if they choose, because it may be covering their HOA, their mortgage, or their insurance.

“It is a meaningful amount that can have a very direct impact on the quality of their life as they age,” she says.

It’s important to note that Social Security payouts vary based on earnings history, cost-of-living adjustments (COLA), and location. The SSA announced its COLA update for 2026 on October 24, which is 2.8%, representing a $56 monthly increase for retirees.

This can lead to tighter budgets for homeowners who face several associated costs, such as HOA fees or unexpected repairs.

Sexton notes that, unfortunately, this trend persists because retirement planning is often driven by short-term needs instead of long-term math.

He says that between mortgage payments, taxes, insurance, and maintenance, housing remains one of the most significant monthly expenses in retirement, amounting to up to 40% of a retiree's income.

“If you claim early, you're locked into a permanently smaller check for life. That means less buffer for property taxes, rising insurance premiums, or unexpected repairs. In finance, shavings make a pile—and over time, that can be the difference between comfortably staying in your home or being forced to downsize under financial pressure,” he says.

What early claiming means for homeowners

In the past five years, the cost of homeownership has jumped 26% as hidden expenses rise, according to
Realtor.com®.

Additionally, mortgages account for “three-quarters of the debt held by Americans 70 and older, according to a May 2024 report from the New York Fed,” AARP reports.

To put this in perspective, the average monthly Social Security benefit is $1,864.87, according to the SSA.

So for homeowners, the benefits of waiting to claim benefits can make or break a comfortable retirement.

And as Rebell argues, claiming early is for the most part a one way street: While there are some limited options to backtrack, generally speaking, the money you leave on the table will be lost forever.

She also said that many people manage their finances on a month-to-month basis, so having that check helps make the numbers add up. Mortgage and rent payments are monthly, so are HOA costs if they have them.

“Housing costs like these are generally fixed items that they can’t cut back on. Having the cash on hand to pay them provides peace of mind and allows them to avoid the stress and anxiety that can come from the many economic pressures so many are facing these days,” she says, adding that the irony is that by taking a lower monthly payment sooner, they leave money on the table that could provide better financial security in the future and help them to stay in their home. 

According to Rebell, if you are worried about housing costs during retirement, plan to eliminate debt before you claim Social Security so you can have more flexibility with your benefits.