Record numbers of Boomers and older adults took Social Security retirement benefits at the height of the Great Recession, in large part to supplement their faltering income as joblessness rose. But a new report out this month finds that the financial situation of older workers may have turned around.
The number of people 62-plus who filed for Social Security last year fell to the lowest rate in 35 years, the report by the non-profit Urban Institute says. An improving jobs market was cited for the declining number of retirement benefit claims — 3 million in 2011.
It was a different story just three years ago. Social Security claims hit an all-time high in 2009, when 3.2 million Americans age 62 and older began collecting benefits, a whopping 25 percent increase from 2007. By contrast, the number of new claims rose by just 1.6 percent between 2005 and 2007, the report found.
High unemployment among workers age 55 to 64 — 6.6 percent in 2009, double the 3.1 percent in 2007 – caused many to tap into their benefit early to cover daily living expenses. But claiming benefits early can jeopardize older adults’ ability to live comfortably in their later years. Social Security permanently lowers monthly payments by about 25 percent when beneficiaries collect at age 62 rather than age 66, when eligibility for full benefits begins. (AARP has a Social Security Benefits Calculator that shows you how much more your monthly benefit will be if you wait until full retirement age to collect).
Since the 2009 spike, the number of people claiming benefits has gone down each year, the report found.
“We seem to be returning to where we were before the recession, with people gradually working longer and taking Social Security later,” says Urban senior fellow Richard Johnson, author of the report. “The surge in layoffs is behind us, so fewer people need to grab on to the lifeline that Social Security provides.”