This happens for the same reasons that people borrow money at exorbitant interest rates: It is better to have money now than it is to have money someday in the unknown future. AND people are willing to pay a price (in many cases a high price, or even an exorbitant price) for this benefit (i.e. having the money now).
It is pretty simple really.
In my case, I plan to defer my Social Security benefits to the maximum extent that has any marginal benefit. By doing so, I am making a bet that I will have some healthy good years at advanced age, to enjoy the extra money that accrues to me and Sue, if I live that long. I will be much the loser if I throw an embolism or have a stroke and die at age 70, plus 3 months, or something of that nature.
OTOH, in my case Sue’s survivor benefits will have *also* been maximized, and she comes from a long-lived family. Her Mom lived to be 104; and her Dad smoked for thirty-plus years and still lived to be 87.
One price of Social Security is that one is constrained to make good guesses about the state of one’s health in one’s declining years. I happen to believe that many citizens know in their hearts when they need to take that money and run, so to speak.
If you survived cancer in your fifties, it may be completely rational to take your social security at age 62. And so forth. You “take your own chances and pay your own dues”, says the silver-tongued devil.