The Social Security Headline That Pushes Early Retirees to Claim at 62
Note: The examples and case studies in this article are hypothetical but represent real situations I have encountered in my practice working with Washington State public employees.
The year she turns 62
Picture a 56-year-old public works manager for a Washington county. She’s in PERS 2 with 29 years of service. She and her husband have about $750,000 saved between their DCP accounts and IRAs.
She plans to retire at 57.
And she keeps seeing the same headline. Social Security’s trust fund is running out.
So her Social Security plan is simple. Claim at 62, the first month she can, and collect what she can before it’s gone.
I understand the instinct. But it rests on a few assumptions that don’t hold up once you look at how the program works.
What “running out” means
The 2026 Trustees Report projects that the trust fund paying retirement and survivor benefits will be depleted in the fourth quarter of 2032 [1].
That’s the year she turns 62.
Payroll taxes keep coming in after that date, though. The Trustees project that incoming revenue would still cover 78% of scheduled benefits once the reserves are gone [1].
A 22% cut would hurt. It’s also a long way from zero.
Jason Fichtner, a former acting deputy commissioner of the Social Security Administration, says depletion doesn’t mean the program is going bankrupt. He doesn’t expect Congress to let the cut happen, although he worries lawmakers will push it to the last minute [2].
There’s some movement. In June, a bipartisan House bill was introduced to create a 13-member commission that would have to report a solvency plan within a year of its first meeting [3]. In July, a bipartisan group of senators introduced a separate bill that sets up a process leading to a vote on a solvency plan [4].
Neither is law yet, so I’d treat the outcome as uncertain until one passes.
One detail tends to get lost in the headlines. An across-the-board cut would apply to whatever check you already have. Fichtner’s own example: he’d rather take a 20% cut on a larger, delayed benefit than on a smaller early one [2].
Claiming at 62 doesn’t get you out of the way of a cut. It just gives the cut a smaller check to land on.
Retiring at 57 won’t zero you out
Her second worry is quieter. If she stops working at 57 and waits until 67 to claim, won’t those ten years with no paycheck drag her benefit down?
Probably not.
Social Security looks at your highest 35 years of earnings, adjusted for wage growth [5]. Unlike your DRS pension, it reaches back across your whole working life.
She worked five years in the private sector before joining the county. By 57, she’ll have 35 years of earnings on her record, so her years in retirement never enter the formula.
The catch is for people who fall short of 35. Years with no earnings count as zeros in the calculation [6]. If you took a long break to raise kids, or spent part of your career in a job not covered by Social Security, count how many years you actually have.
The pension changes the conversation
For someone with a full retirement age of 67, claiming at 62 cuts the monthly benefit by 30%. Waiting until 70 raises it by 24% [2].
That’s a big spread. But I don’t think the math alone settles it for this group.
Research by David Blanchett and Michael Finke found that retirees spend about 80% of their lifetime income, like pensions and Social Security, but only about half of what’s available from their savings and other sources. Married 65-year-olds in their data were withdrawing only about 2% a year from savings [7].
Spending a monthly check feels normal to most people, while drawing down a balance makes them nervous.
She already has a check coming. Her DRS pension starts when she retires and lasts the rest of her life, which is an advantage most private-sector workers don’t have.
So the question becomes how much of her retirement she wants in check form versus balance form. Delaying Social Security means drawing more from DCP in her late 50s and early 60s. If she claims at 62 instead, she keeps more in savings but lives with a smaller check for life.
Her health matters here, and so does how her husband’s benefit fits with hers.
Where the CPA in me gets nervous
Then there’s the tax bill.
To figure out how much of your Social Security is taxable, the IRS adds half your benefits to all your other income, including tax-exempt interest [8]. For married couples filing jointly, above $32,000 up to 50% of benefits can be taxable. Above $44,000, up to 85% can be [9].
Say her pension is around $60,000 a year. That alone puts them past $44,000 before a dollar of Social Security is counted.
The new senior deduction softens this a little. From 2025 through 2028, people 65 and older can deduct an extra $6,000 each, with the deduction phasing out above $150,000 of modified adjusted gross income for joint filers [10]. The rules for how much of your benefit is taxable stayed the same.
The years between retiring at 57 and starting Social Security are often her lowest-income years. That window is where Roth conversions can make sense, and claiming early shrinks it.
Before you pick an age
Log into your my Social Security account and check your earnings record for errors [5]. Then pull your estimates at 62, 67, and 70 and set them next to your DRS pension estimate.
That side-by-side view will tell you more than any headline about the trust fund.
If you’re concerned about your current financial plan and would like to explore professional help, consider reaching out.
I specialize in helping Washington Public employees who are nearing retirement or are retired, reduce taxes, maximize pensions, and retire stress-free.
No sales pressure. No obligations. Just professional guidance to help you make the best decision for your financial future.
-Seth Deal
Sources
[1] Social Security Administration, Board of Trustees. “The 2026 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds.” 2026. https://www.ssa.gov/oact/TR/2026/tr2026.pdf
[2] Anderson, Brian. “Social Security’s Reckoning: Dr. Jason Fichtner Explains What the New Trustees Report Means for 401(k) Savers.” 401(k) Specialist. June 24, 2026. https://401kspecialistmag.com/2026-social-security-trustees-report-insights-fichtner/
[3] Office of Representative Tom Cole. “Cole, Suozzi Introduce Bipartisan Social Security Commission Act.” June 9, 2026. https://cole.house.gov/media/press-releases/cole-suozzi-introduce-bipartisan-social-security-commission-act
[4] Office of Senator Tim Kaine. “Kaine, Colleagues Introduce Bipartisan Proposal to Encourage Congressional Action on Social Security.” July 14, 2026. https://www.kaine.senate.gov/press-releases/kaine-colleagues-introduce-bipartisan-proposal-to-encourage-congressional-action-on-social-security
[5] Social Security Administration. “Your Retirement Benefit: How It’s Determined.” Publication No. 05-10070. May 2026. https://www.ssa.gov/pubs/EN-05-10070.pdf
[6] Social Security Administration. “More Years of Work May Increase Your Future Retirement Benefits.” https://www.ssa.gov/myaccount/assets/materials/additional-work.pdf
[7] Blanchett, David, and Michael Finke. “Retirees Spend Lifetime Income, Not Savings.” Working paper. December 30, 2024. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=5076626
[8] Internal Revenue Service. “Are Social Security Benefits Taxable?” https://www.irs.gov/node/19631
[9] Social Security and Medicare Boards of Trustees. “Status of the Social Security and Medicare Programs: A Summary of the Annual Reports.” https://www.ssa.gov/oact/trsum/
[10] Internal Revenue Service. “Working Families Tax Cuts: Tax Deductions for Working Americans and Seniors.” FS-2025-03. July 14, 2025. https://www.irs.gov/newsroom/working-families-tax-cuts-tax-deductions-for-working-americans-and-seniors