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The Takeaway: Number of Americans Taking Social Security Early Hits 35-Year Low

In 2011, the number of Americans taking early Social Security benefits dropped to a 35-year low, according to a new report from the Urban Institute. For the second consecutive year, those taking benefits fell, to 27 percent of the number of eligible older adults. That’s down from 31 percent in 2009, reestablishing a 12-year downward trend interrupted only by the recent recession.

Dan Kadlec at Time explains:

Some older workers who lost jobs in the faltering economy opted to retire rather than search for another employer. They may have started collecting Social Security sooner than they had planned because of the forced nature of their retirement. That contributed to a spike in the percentage taking early benefits.

The trend back downward is probably a good thing. A GAO study last year confirmed what retirement experts at AARP have been saying for years: It pays to delay taking Social Security benefits. You’re allowed to start collecting Social Security checks at age 62, though the monthly payment will be reduced. Full benefits accrue at age 66. But for each year you put off collecting between 62 and 70, you’ll increase your monthly benefit by 5 to 8 percent.

Another new retirement security study (this one from research firm Brightwork Partners) found that American households least financially prepared for retirement saved even less this year, while those who had nice nest eggs saved even more aggressively. “It’s a very striking, polarizing impact on the distribution” of retirement savings, said Merl Baker, principal of Brightwork Partners.

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