Should You Take Social Security Now or Later?

A Comprehensive Look at the Real Risks, Policy Shifts, and What Higher Earners Need to Consider

By Michael A. Jeter

(Opinion based on available data, current projections, and historical government behavior. This is not financial advice.)

Introduction

Every year, millions of Americans face one of the most important financial decisions of their lives:

When should I take Social Security?

The traditional advice is simple:

“Wait as long as possible so your monthly benefit is higher.”

But the world we live in today looks very different from the one that existed when those rules of thumb were created. The U.S. faces unprecedented demographic pressure, rising federal debt, persistent deficit spending, shrinking worker-to-retiree ratios, and structural political gridlock.

Combine this with the 2033–2034 Social Security insolvency projections, and the decision becomes far more complicated than the simplistic “wait until 70” narrative.

This article breaks down the risks, potential policy changes, the impact of your tax bracket, and how waiting versus taking benefits early could play out — especially for mid-to-high earners.

Again, this is my opinion, grounded in historical patterns and current data.It should not be taken as personal financial advice. Each individual should evaluate their own circumstances.

1. The Reality: Social Security Insolvency Is a Mathematical Problem, Not a Political One

According to the 2024 Trustees Report and Congressional Budget Office, the Social Security system is projected to reach a funding shortfall around:

2033–2034

The year depends on which model you read, but the conclusion is the same.

Without Congressional action, the system legally must:

🔻 Cut benefits by roughly 20–25% across the board.

That means everyone — from early retirees to those at full retirement age — would see an automatic, immediate reduction in their monthly checks.

No legislation is required for this cut to happen. The law already mandates it once the trust fund is depleted.

This reality alone shifts the entire discussion about claiming early versus waiting.

2. Will Congress Fix It? History Gives Us Clues

In 1983, Congress raised the retirement age from 65 to 67. But they did it gradually over 22 years and protected everyone who was already close to retirement age.

What does that tell us?

✔ Congress avoids hurting older voters

✔ Congress acts late, only under pressure

✔ Solutions tend to be “stealth fixes” rather than direct cuts

So, while outright insolvency may be politically unlikely, the methods Congress uses to fix the system may still reduce your net benefit.

And these methods will not hit everyone equally — higher earners will be targeted first.

3. The Big Unknown: Taxes on Social Security Will Very Likely Increase

Most people don’t realize that Social Security is already taxed, and the thresholds for taxation have never been adjusted for inflation since 1983.

This ensures more retirees fall into the taxable category each year.

Under current law:

• Up to 85% of your Social Security benefits can be taxable.

• The 85% threshold begins at:

  • $44,000 for married couples

  • $34,000 for singles

• These numbers have not moved in over 40 years.

But here’s the real risk:

Potential Future Changes Being Discussed

• Increasing the taxable portion from 85% to 100%

• Imposing additional surtaxes on Social Security benefits for incomes above $75k or $100k

• Lowering the income thresholds dramatically

• Introducing direct means-testing, reducing benefits for those with assets or higher AGI

These are not fringe ideas; they are actively being modeled by policy think tanks.

The U.S. government is unlikely to make blunt, obvious cuts to seniors.But they can and will increase taxation, especially for higher-income retirees.

4. What This Means for Higher Earners

If you are earning $75,000+, or if you have other income sources (pensions, consulting, rental income, investments, etc.), then you are firmly in the zone where:

• 85% of your Social Security benefits are already taxable

• You may be subject to future surtaxes

• Future policy could reduce your net benefit through “stealth” taxation

• Means-testing could phase out part of your benefit if you have significant assets

This creates a paradox:

➤ The more you wait to claim, the more the government can tax.

➤ The more your benefit grows, the more exposed you become to future means-testing.

➤ Higher earners are the first group targeted in almost all proposed reform models.

This reality flips the traditional advice on its head.

5. The Risk of Delaying: The Government’s Policy Tools Will Hit People Who Wait

Here are the most likely tools Congress will use to shore up Social Security:

1. Raising the Full Retirement Age (FRA) Again

This won’t affect people currently in their 60s — historically, Congress protects near-retirees — but it impacts future generations.

2. Increasing payroll taxes on higher earners

Raising or removing the wage cap (currently $168,600 in 2024).

3. Increasing taxation of benefits

100% taxable benefits are very likely for middle and upper-middle income retirees.

4. Means-testing

A politically palatable way to reduce benefits without calling it a “cut.”

5. Slower COLA (Cost-of-Living Adjustments)

This hurts people who wait to claim because their future purchasing power is quietly eroded.

6. Broad across-the-board cut of 20–25% if Congress does nothing

This is the default outcome in 2033–2034.

6. How Waiting Until 67 or 70 Can Backfire for High Earners

Let’s examine the logic of delaying benefits:

Many financial planners say:

“Wait until 70 and get the maximum monthly check.”

But this ignores several critical factors:

A. Taxation risk grows the longer you wait

If Congress taxes 100% of benefits, or adds surtaxes, your higher monthly check becomes a bigger taxable liability.

B. Means-testing targets higher earners, and those who wait receive the biggest haircut

Your “reward” for waiting becomes the government’s easiest target.

C. A 20–25% universal cut in 2033 hits the highest checks hardest

A bigger check has more to lose.

D. Delay = fewer years of full benefits before potential changes

If you start at 70 in 2032, you may get only 1–2 years of full payments before the projected cuts.

E. Inflation risk and COLA erosion disproportionately hurt delayed claimers

By the time you start, the real value may already be diminished.

7. The Case for Taking Benefits Early (Objectively, Not Emotionally)

If you claim Social Security at 62–64, you benefit from:

✔ More years of full, uncapped benefits

✔ Extraction of value before any future reforms

✔ Lower exposure to means-testing

✔ Lower exposure to taxation increases

✔ Liquidity during your most active years

✔ Ability to convert U.S. dollars into harder assets (gold, CHF, BTC)

✔ Guaranteed income regardless of political change

✔ Flexibility if future policies penalize later claimers

From a purely strategic standpoint, early claiming isn’t fear-driven — it’s risk management in a system facing long-term strain.

8. But What If You’re Healthy and Expect to Live a Long Life?

Longevity is the strongest argument for waiting.

However…

Even in long-longevity scenarios, the effective benefit of waiting shrinks if:

• COLA is reduced

• Higher-income retirees face surtaxes

• Benefits become fully taxable

• A structural 20–25% cut occurs in 2033

• Means-testing phases out part of your benefit

• Inflation erodes the real value of delayed claiming

In other words, waiting only guarantees a larger number on your award letter — not necessarily more value in your pocket.

9. The Most Important Point: Your Tax Bracket Changes the Equation Entirely

A retiree earning $30,000 from Social Security and a pension may pay little tax.

But someone earning $75,000–$150,000 from consulting, part-time work, or investments?

They will:

• Pay far more tax

• Lose more benefit to means-testing

• Get hit sooner by surtaxes

• Be the first targeted for “equitable reforms”

Waiting becomes increasingly detrimental the higher your income is.

10. My Opinion (Not Advice): The Objective Case for Claiming Earlier

Based on:

• Insolvency projections (2033–2034)

• Historical Congressional behavior

• Political incentives to avoid direct cuts

• The rising likelihood of taxation-based reductions

• The targeting of higher earners

• The risk of means-testing

• The erosion of COLA for upper-income retirees

• The real possibility of structural cuts

• The fact that FRA increases won’t affect today’s 60-somethings

• The reality that early claimers extract more years of “full-benefit value”

There is a rational argument for:

Taking Social Security earlier (e.g., 62–64) to capture more years of guaranteed payments before the system undergoes major change.

This does not apply to everyone. But for:

• Higher earners

• People still working

• People with other assets

• People in good health

• People concerned about U.S. fiscal stability

• People who prefer sovereignty over optimization

• People with international plans

• People who do not want to rely on the U.S. government in their 70s and 80s

…early claiming is not just a reasonable option —it may be the more defensive, more strategic, and more rational one.

Again: This is my opinion — based on data, projections, and government behavior — not financial advice.

11. Final Thoughts

Your Social Security decision should not be driven by fear, but by strategy.

In a stable system, waiting for a larger benefit may make sense.

But in a system facing:

• demographic collapse

• political gridlock

• rising debt

• trust fund insolvency

• shrinking labor force

• increasing longevity

• rising entitlement costs

• pressure for tax increases

…the smartest move is often to secure guaranteed value while it still exists in its current form.

And that may mean claiming earlier than the textbooks recommend.

Again:

This article reflects my opinion and interpretation of current realities.It is not personal financial advice. Consult a licensed financial planner or tax professional for your specific situation.