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October 3rd, 2009

More Americans Turning to Social Security At Younger Age

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Social Security applications have surged more than expected in 2009 due to the recession. The increase in applications, while relatively typical during economic downturns, could likely put an added strain on the Administration’s already uncertain future, especially with the wave of baby boomers due to collect:

“We are seeing a significant increase in both retirement and disability applications as a result of the recession,” said Mark Lassiter, a Social Security spokesman.

The 150,000 extra retirees may add to the financial pressure on the entitlement program. In May, Social Security trustees said expenses would exceed revenue beginning in 2016, one year earlier than their previous forecast.

The Social Security Administration had projected an increase of 315,000 applicants for the 12 months ending Sept. 30 partly because the first baby boomers — those born right after World War II — are starting to retire.

Americans qualify for Social Security beginning at age 62. Yet, the earlier you begin to collect, the less benfits you are eligible to receive than if you waited until age 65. However, the recession has left many Americans with little choice but to draw on their benefits sooner than expected.

An anemic job market has left even the younger, highly-qualified audience in desperate search of employment; not to mention older Americans where opportunities are fewer and farther between:

Likewise, many of those applying for retirement benefits are unlikely to find new employment and don’t plan to go to back to school to train for a new career, he said.

“Investing in additional education is less likely to be profitable when you’re 62 than 42,” Van de Water said. “The tendencies at that point are to apply for benefits because you’ve lost your primary source of income.”

Has the recession caused you or anyone you know to apply for Social Security benefits earlier than planned?

(hat tip: The LA Times)

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5 Responses to “More Americans Turning to Social Security At Younger Age”

  1. Lucia Says: October 3rd, 2009 at 4:32 pm

    My husband is 61 and plans to retire early. Unemployment rate in our rural county is 17% and 12% for the state. Competition for work is intense and we cannot move away from my elderly parents. My husband applies for jobs several times a week that range from food service to warehouse, but he is competing with younger men with families to support. He cuts firewood for sale and helps the neighbors, so that he’s not laying around the house. If jobs are going to remain scarce for another 5 years or more, it makes sense for him to retire. He could still cut firewood and do odd jobs for the neighbors.

  2. Tim Manni Says: October 4th, 2009 at 10:45 am

    Lucia,

    It seems your situation is the exact reason many older Americans have and will decide to retire early. I wish your husband all the luck in looking for work.

    Here’s a question: How much income can you’re husband bring in while collecting Social Security?

    Thanks,
    Tim

  3. Lucia Says: October 5th, 2009 at 8:24 am

    He could earn just under $14K a year, which is what he earned anyway these past few years. I plan to keep working full time until our mortgage is paid off, which should be when I’m 67 years old. But that’s only a plan and life is full of surprises.

  4. Tim Manni Says: October 5th, 2009 at 11:17 am

    Hey Lucia,

    Thanks for answering. Ha, “But that’s only a plan and life is full of surprises;” aint that the truth. Well, it seems like you guys have a plan, which is as best as you can do these days.

    Good luck, we always appreciate your input.

    Tim

  5. Survey: Americans Not Giving Up Their Jobs | Mortgage Loan Refinance Guru Says: October 9th, 2009 at 11:24 am

    [...] week we reported that the lack of employment opportunities are forcing more Americans than usual to apply for Social Security benefits before age 65. But there’s a flip side of that [...]

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Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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