The latest trend on social media platforms like TikTok suggests that some finfluencers are recommending Americans to claim Social Security as soon as they are eligible at age 62 and to invest the monthly retirement benefits into stocks. This new investment strategy stands in stark contrast to the traditional advice to delay claiming Social Security for as long as possible — ideally until age 70 — in order to maximise monthly payouts.
Claiming Social Security at age 62 results in significantly lower monthly payments over a person's lifetime. However, these finfluencers argue that claiming early and investing the benefits into stocks can lead to substantial long-term gains. They cite the historical average annual return of approximately 7% on stocks after inflation, suggesting that such a strategy could be highly beneficial over time. It's important to note, however, that Social Security benefits are inflation-adjusted and considered a risk-free income source, unlike the stock market which can be highly volatile.
