A host of reasonable incentives nudge us to hold off on claiming Social Security: spousal benefits increase (to a point), and holding off can markedly increase the size of your monthly check from the government. And yet, the vast majority of retirees start claiming Social Security well before age 70.

As you can see below, about one-third of us claim as soon as we can, while another third claim at full retirement age. After all is said and done, only 3% of men and 5% of women actually wait until 70 despite these benefits. 

Why is that?

Chart showing when men and women claim Social Security

FRA = Full Retirement Age. Data source: Social Security Administration 2016 Statistical Supplement

It comes down to two simple factors: either they can't work anymore, or they don't want to.

When work is no longer an option

In August 2017, The National Retirement Institute (NRI) released a survey detailing -- among other things -- when and why senior citizens choose to claim Social Security benefits. Interestingly, over half of soon-to-be retirees (50 years of age or older) expected to wait at least until full retirement age before claiming. But we know from the data there's little chance of this happening.

Where's the disconnect?

We often don't like imagining a scenario where we aren't able to work anymore for health reasons or because we aren't needed or desired in our line of work for professional/technological reasons. That creates a giant blind spot when it comes to forecasting when we'll claim Social Security benefits on our own terms. 

Let's tackle health first: when the NRI asked current retirees about health problems, survey participants admitted that they were unprepared for the onset of major health problems:

  • 75% of retirees said health problems started occurring sooner than expected.
  • Of those respondents, 65% said the health problems began five or more years earlier than they had planned for.

If we can't work for health reasons, we're going to rely on Social Security at a younger age.

Loving couple sitting together and holding hands

Image source: Getty Images

The same is true if we can't find work -- or enough work -- for other reasons. When the NRI asked current retirees why they started receiving benefits before full retirement age, 22% specifically cited being laid off or unemployed. But it doesn't end there -- far more said they needed the money to make ends meet:

  • 46% said it was necessary to pay living expenses.
  • 20% said they had no other source of income.

Even if only one-fourth of early retirees cited being unemployed, almost half said that they couldn't afford daily needs without Social Security -- which means that a high percentage were likely underemployed.

Don't want to work anymore

Of course, there are some retirees who can keep working their jobs, but simply don't want to anymore. When retirees were asked why life was better after retirement than it was before, roughly 75% cited "no longer working" as the primary reason. 

This makes sense: when retirement is more of a thought exercise that we write down on paper, it's not hard to take our current circumstances (working) and extend them forever into the future. But when the reality of retirement hits -- putting our skin in the game and no longer making it a hypothetical -- the opportunity to relax is more enticing than we expect.

And this isn't all bad either. In a separate study by Merrill Lynch and AgeWave, retirees were by far the happiest of all age groups.

Chart showing respondents' feelings at different ages

Data source: Merrill Lynch/AgeWave

It shouldn't be surprising, then, that when the NRI asked recent retirees who claimed Social Security early if they would change their decision, 78% said "No." 

As award-winning former Fool Morgan Housel once wrote, "having control over your time is the only reasonable financial goal." We might scoff at that concept in our working years. But in the end, the draw of freedom of time is much stronger than our younger selves would ever suspect. 

So while we might get depressed realizing that most people don't wait to claim Social Security at 70 because they either can't work or don't want to, there's a silver lining: most of them wouldn't trade their situation out for an alternate.