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The Takeaway: Forced To Take Early Social Security
Posted By Elizabeth Nolan Brown On June 11, 2012 @ 8:39 am In Bulletin Today | No Comments
In May, the Urban Institute reported that the number of eligible Americans taking early Social Security benefits had hit a 35-year low. But the recession and protracted high unemployment have left some older adults-such as 62-year-old Clare Keany-forced to take benefits earlier than planned.
Keany, profiled by the New York Times, reluctantly applied for Social Security this year after losing her job in 2008 and being unable to find a new one, despite an extensive search. It’s not an uncommon experience for older workers: A Government Accountability Office report found that only about a third of those 55 to 64 who lose jobs from 2007 through 2009 had found full-time work again by January 2010, compared to 41 percent for younger workers.
Older workers also stay unemployed longer-an average of 34.1 weeks for people 55-plus, versus 22 weeks for all jobless people. And those that can’t find work often end up claiming early Social Security: According to an analysis by the Urban Institute, 37 percent of older workers who lost their jobs between 2008 and 2011 and did not return to work ended up claiming Social Security as soon as they turned 62.
Of course, claiming Social Security at 62 means receiving a reduced monthly benefit for the rest of your life; those who collect early get 20 to 30 percent less a month than they would if they waited until full retirement age. To put it another way: For each year you put off collecting between 62 and 70, you’ll increase your monthly benefit by 5 to 8 percent. [See AARP’s Social Security benefits calculator here.]
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Photo: Michal Czerwonka/The New York Times/Redux
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