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Tue, December 9, 2025
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Viral TikTok Video Urges Americans to Withdraw Social Security Early for Stock Market Gains
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Published in Stocks and Investing on Tuesday, December 9th 2025 at 6:13 GMT by IBTimes UK- 🞛 This publication is a summary or evaluation of another publication
- 🞛 This publication contains editorial commentary or bias from the source
Should Americans take Social Security and invest it? Viral TikTok advice sparks debate
A viral TikTok clip that has amassed more than 40 million views is reigniting a centuries‑old debate about how and when Americans should tap into Social Security. The video, posted by a 29‑year‑old creator who goes by “Sofi” (not a certified financial planner), urges viewers to withdraw their entire Social Security benefit early—sometimes as soon as the age of 62—then “hustle” the money into the stock market or other high‑growth investments. “You can make more in a few years than you’ll ever get from the monthly check,” Sofi declares, and he cites a handful of online influencers who have made millions through “social media investing.”
The post went viral, spurring a barrage of comments and follow‑up videos. Many users expressed curiosity about the strategy, while others flagged the claim as a dangerous shortcut. The question that now grips the public is: is the TikTok recommendation a savvy strategy or a reckless gamble that could leave retirees poorer than if they had kept the Social Security stream intact?
The basic logic behind the TikTok advice
The core of Sofi’s argument is that early withdrawal of Social Security—currently available at age 62—can be invested for a higher return. The premise hinges on two factors:
Opportunity cost – By receiving a lump sum, the investor can potentially earn an annualized return of 6–8 % in diversified index funds, outpacing the roughly 2.7 % average growth of the Social Security trust funds (source: Investopedia article on the program’s finances).
Tax efficiency – If the withdrawn funds are placed in a tax‑advantaged vehicle such as a Roth IRA, future withdrawals can be tax‑free, provided the account has been open for at least five years and the account holder is over 59½.
Sofi also argues that early claim reduces the monthly benefit by roughly 0.5 % for each month before the full‑retirement age (typically 67 for those born in 1960 or later). He suggests that the loss in the monthly benefit is offset by the compounding gains of an investment portfolio.
What the experts say
The majority of professional financial planners and economists disagree with Sofi’s simplistic message. Dr. Mary J. O’Brien, a professor of economics at the University of Chicago, notes that the Social Security benefit is “an annuity that guarantees a lifelong income.” She warns that “reducing the benefit for a few years can have a domino effect, especially for retirees who have fixed budgets.”
A 2023 study by the Urban Institute found that 78 % of retirees rely on Social Security for at least 60 % of their monthly expenses (Urban Institute, Social Security and Retirement Security, 2023). For these individuals, a reduction in the benefit could jeopardize essential expenditures such as healthcare, housing, and nutrition.
Michael Bender, a certified financial planner and author of The Retirement Revolution, wrote in Forbes (link: https://www.forbes.com/sites/michaelbender/2024/02/14/early-social-security-early-investment) that “while it’s tempting to chase market gains, most retirees will not out‑perform the Social Security guarantee. The market’s volatility can wipe out a sizable portion of the investment, especially if the withdrawal occurs during a downturn.”
The Social Security Administration (SSA) maintains a detailed FAQ page (https://www.ssa.gov/quickfacts/) that explains the mechanics of early claiming. According to the SSA, a person who claims at 62 will receive a permanently reduced benefit calculated as:
[ \text{Monthly Benefit} = \text{Full‑Retirement Benefit} \times (1 - 0.5\% \times \text{Months Early}) ]
Even when the benefit is reduced, the remaining monthly payment still carries a social safety net that is “guaranteed for life” and not subject to inflation or market downturns.
The tax angle
Early withdrawal of Social Security does not trigger a tax penalty per se, but it does affect your income stream. The SSA’s own quick facts page explains that “Social Security benefits are taxable only if your combined income (adjusted gross income + nontaxable interest + half your benefits) exceeds a threshold." If the early‑withdrawn amount is used to build a retirement portfolio, the taxable gains will depend on the investment vehicle. Roth IRA contributions, for example, are made with after‑tax dollars, but qualified withdrawals are tax‑free. Traditional IRAs, on the other hand, are taxed upon withdrawal.
A broader debate about Social Security’s future
Beyond the individual decision to invest or not, the TikTok controversy has fed into a larger national debate about the political status of Social Security. The program, which began in 1935, is funded through payroll taxes and has faced calls for reform, especially as the population ages. Critics of the early‑withdrawal trend argue that “the social contract underpinning Social Security—guaranteeing income for those who have paid into it—is compromised when people treat it as a lump‑sum asset to be speculatively invested.”
Some policymakers suggest reforms that would allow more flexible claiming options without reducing the monthly benefit. Others push for stronger safety nets, such as private pension funds or guaranteed annuity options that would complement Social Security rather than compete with it.
Bottom line
The viral TikTok clip has succeeded in sparking conversation, but the consensus among financial professionals is clear: Social Security is not a “buy‑low, sell‑high” opportunity. For most retirees, the program offers a reliable, low‑risk source of income that outstrips the average annual returns of most markets over the long haul. While a savvy investor might find a niche strategy that involves early claiming and disciplined investing, the general rule of thumb remains: Keep the benefits, and only consider early withdrawal as a last resort after thorough analysis and consultation with a qualified financial advisor.
For more information on how early claiming works and what the tax implications are, the SSA’s official website (https://www.ssa.gov) and the Investopedia guide on Social Security (https://www.investopedia.com/social-security-benefits) are excellent resources. The debate is far from over, but the core message is that a one‑size‑fits‑all approach—especially one promoted on a platform like TikTok—does not account for the diverse financial realities of today’s retirees.
Read the Full IBTimes UK Article at:
[ https://www.ibtimes.co.uk/should-americans-take-social-security-62-invest-it-viral-tiktok-advice-sparks-debate-1761529 ]
