Fewer Are Claiming Social Security Benefits at 62

Boomers are waiting longer to retire than their parents did. Only about one in four Boomers born in 1957 claimed Social Security retired worker benefits at the earliest possible age of 62, according to an analysis of Social Security Administration data by the Center for Retirement Research at Boston College. In contrast, early claiming was the norm for men and women born in 1940 or earlier. 

Early claiming has fallen with each succeeding cohort of Boomers (birth years 1946 through 1964), with the exception of an uptick in 2009 as a consequence of the Great Recession. Boomers born in 1957 turned 62 in 2019, the latest year for which SSA data are available... 

Percent who claimed Social Security benefits at age 62, by birth year and year turned 62

Birth year	Year 62	Men	Women
1957	2019	24.4%	26.6%
1956	2018	26.8	29.3
1955	2017	28.0	30.7
1954	2016	29.4	32.4
1953	2015	31.4	34.9
1952	2014	33.4	36.9
1951	2013	35.5	39.4
1950	2012	37.8	41.5
1949	2011	40.8	44.3
1948	2010	43.6	46.8
1947	2009	45.2	48.7
1946	2008	39.7	44.7
1940	2002	50.2	54.6
1930	1992	56.6	61.4

The fact that so few Boomers are claiming benefits early is a good thing. "Claiming later will lead to a higher monthly benefit check and generally improve retirement income security," say CRR's Anqi Chen and Alicia H. Munnell. While the Covid recession may have boosted early claiming in 2020, the researchers do not think it will permanently reverse the trend towards later claiming.

Source: Center for Retirement Research at Boston College, Pre-Covid Trends in Social Security Claiming

Fewer Claiming Early Social Security Benefits

The percentage of older men and women who claim Social Security benefits at age 62—the earliest possible age to begin receiving retired-worker benefits—has dropped steeply over the past two decades. Behind the decline is the greater labor force participation of older Americans, according to an analysis by Patrick J. Purcell of the Social Security Administration. The labor force participation rate of men aged 60 to 64 grew from 53 to 63 percent between 1995 and 2018, while the labor force participation of their female counterparts climbed from 38 to 52 percent.

Among 62-year-old men, the rate of Social Security claiming fell from 44.1 percent in the 1995–99 time period to just 22.1 percent in 2015–18. Among 62-year-old women, the figure fell from 49.4 to just 24.6 percent during those years. Apparently, older Americans are getting the message—the longer they wait to claim Social Security, the bigger their monthly benefit.

As early claiming has declined, there has been a surge in claiming at age 66—deemed Full Retirement Age (or FRA) by the Social Security Administration for those born between 1943 and 1954. Among 66-year-olds in 2015–18, the rate of claiming was 55.7 percent for men and 48.0 percent for women. These figures are up sharply from the 28.2 and 27.7 percent, respectively, of 1995–99.

Purcell notes in his analysis that "trends in retirement age—and in the age at which individuals claim Social Security benefits—can change substantially in a short time." We're about to see just how rapidly claiming rates can change. As older workers lose their jobs due to the coronavirus pandemic, early claiming of Social Security benefits may become more popular again.

Source: Social Security Administration, Employment at Older Ages and Social Security Benefit Claiming, 1980–2018

Retirement Years Have Expanded. Now What?

"The expansion of retirement years has been one of the most profound societal changes of the past eight decades in the United States," write Eugene Steurerle and Damir Cosic of the Urban Institute. This expansion is straining the Social Security system's finances.

Since the Social Security program first began to pay benefits in 1940, the length of retirement (i.e., receipt of Social Security benefits) has expanded by more than a decade due to rising life expectancy and early claiming. If men and women today were to collect Social Security benefits for the same number of years as their counterparts in 1940, they would have to delay claiming their benefits until age 74 (men) or 75 (women). Instead, the average age of Social Security claiming is 64, with many claiming as early as age 62.

Although Social Security's full retirement age is rising from 65 to 67, the earliest age allowed for Social Security claiming (62) remains the same. The consequence is this: a woman retiring at age 62 in 2022 will receive Social Security benefits for 29 percent of her life and 58 percent of her adulthood. Such lengthy retirements are not financially sustainable.

"Reform must address the unavoidable question posed in the title of this brief," conclude the authors. How should Social Security adjust when people live longer?

Source: Urban Institute, How Should Social Security Adjust When People Live Longer?

Low Fertility May Be Here to Stay

"The most pressing current issue for the Social Security Trustees is how to think about the sharp decline in the total fertility rate," says Alicia H. Munnell, director of the Center for Retirement Research at Boston College in an analysis of Social Security's 2018 Trustees Report. According to the report, which projects the finances of the Social Security program 75 years into the future, the Social Security Trust Fund this year will collect less through taxes and interest than it pays out in benefits. The fund is projected to run out of money in 2034.

The Trustees need to get the nation's fertility rate right when they project the future finances of the system. That's because the fertility rate is one of the most important variables for determining the long-term financial stability of the system. For older Americans to receive benefits, younger Americans must pay into the system. Without enough younger Americans, the system breaks down.

Munnell examines historical patterns in fertility to determine whether we can expect the current low rates to rebound as the economy improves. Her analysis focuses on the total fertility rate (TFR)—or the number of children a woman will have in her lifetime based on current age-specific birth rates. In 2017, the TFR was 1.76, well below the TFR of 2.0 assumed by the end of the projection period in the Trustees Report.

Historically, the TFR has fallen during recessions and increased during expansions, Munnell's analysis shows. But this has not happened in recent years. The current low fertility rate is at odds with the ongoing economic expansion. This suggests that it could be a permanent shift. "It seems hard to make the case at this point for a cyclical rebound in the TFR," Munnell says.

If the nation's low fertility is the new normal, then the Social Security Trust Fund needs to make changes to the program sooner rather than later. This will "share the burden more equitably across cohorts, restore confidence in the nation's major retirement program, and give people time to adjust to needed changes," Munnell concludes.

Source: Center for Retirement Research at Boston College, Social Security's Financial Outlook: The 2018 Update in Perspective

Social Security is at Least Half of Income for Most 65+

Most Americans aged 65 or older depend on Social Security for at least 50 percent of household income, according to an analysis of 2015 Current Population Survey data in Social Security Bulletin. Here are the percentages by demographic characteristic...

• By age: Social Security accounts for at least half of household income for 51.8% of people aged 65 or older, including 61.4% of people aged 80 or older.
• By sex: Social Security accounts for at least half of household income for 55.2% of women aged 65 or older and 47.5% of men in the age group.
• By race and Hispanic origin:  Social Security accounts for at least half of household income for 51.5% of Hispanics, 51.8% of non-Hispanic Whites, and 56.9% of Blacks aged 65 or older.
• By educational attainment:  Social Security accounts for at least half of household income for 57.9% of high school graduates aged 65 or older. Among college graduates in the age group, a smaller 34.9% depend on Social Security for at least half of household income.
• By income quintile: Social Security accounts for at least half of household income for 86.6% of people aged 65 or older in the lowest income quintile, 82.3% of those in the second income quintile, and 62.7% of those in the third income quintile. Among those in the fourth income quintile, the figure is a smaller 24.8%. Among those in the highest income quintile, just 2.2% depend on Social Security for at least half of their household income.

Source: Social Security Administration, Social Security Bulletin, The Importance of Social Security Benefits to the Income of the Aged Population

Who Claims Social Security at Age 62?

Are those who claim Social Security benefits early—at age 62—and receive a reduced benefit for life better or worse off than those who wait? That question was posed by the Center for Retirement Research in an analysis of data from the Health and Retirement Study. The answer: those who claim at age 62 are a mixture of the "disadvantaged," described as those with little education and poor job prospects, and the "advantaged" who have at least some college and more financial resources such as defined-benefit pension plans. The results of the study show...

• Most Americans have gotten the message and are waiting to claim Social Security, which will boost their retirement income. The percentage of households claiming Social Security at age 62 has fallen from 52 percent among the cohort of beneficiaries born in 1931-36 to 47 percent among those born in 1942-47. 
• Despite the decline in early claiming, nearly half of households still claim early. And the 66 percent majority are not prepared for retirement, the study finds—meaning their projected retirement income is not high enough to meet the recommended replacement rate. About 80 percent of the disadvantaged are unprepared. Among the advantaged, a smaller 40 percent are unprepared because many have the additional stable income provided by a defined-benefit pension plan.

"The results are discouraging," say the researchers, because they reveal the importance of defined-benefit plans to retirement preparedness. "These plans may persist in the public sector, but are not coming back in the private sector. The challenge is whether 401(k)s can be enhanced enough to fill that gap."

Source: Center for Retirement Research at Boston College, Are Early Claimers Making a Mistake?

Prescription Painkiller Abuse: The Personal Connection

Most Americans have a personal connection to prescription painkiller abuse, according to a Kaiser Family Foundation survey. The 56 percent majority of Americans say they 1) personally know someone who has taken a prescription painkiller not prescribed to them; and/or 2) personally know someone who has been addicted to prescription painkillers, and/or 3) personally know someone who died from a prescription painkiller overdose.

The demographic segments most likely to have a personal connection to prescription painkillers are Whites, those with a household income of $90,000 or more, adults under age 50, those with some college, college graduates, suburban residents, and men.

The demographic segments least likely to have a personal connection to prescription painkillers are Hispanics, people aged 65 or older, Blacks, those with a high school diploma or less education, urban residents, and women.

Source: Kaiser Family Foundation Health Tracking Poll

Boomers Waiting to Claim Social Security Benefits

Boomers are less likely to claim Social Security benefits at age 62 (the earliest possible age) than their counterparts were in 1985, according to a study by the Center for Retirement Research at Boston College. Here are the percentages of men and women who claimed Social Security at age 62 for those who turned 62 in 2010 (born in 1948) and those who turned 62 in 1985 (born in 1923)...

Born in 1948 and claimed Social Security benefits at age 62 in 2010
Men: 36%
Women: 40%

Born in 1923 and claimed Social Security benefits at age 62 in 1985
Men: 52%
Women: 64%

Source: Center for Retirement Research at Boston College, Trends in Social Security Claiming

Income of the Population 55 or Older

Among people aged 55 or older, earnings as a share of total income by age...

Aged 55 to 61: 73%
Aged 62 to 64: 55%
Aged 65 to 69: 32%
Aged 70 to 74: 16%
Aged 75 to 79: 9%
Aged 80-plus: 4%

Among people aged 55 or older, Social Security as a share of total income by age...

Aged 55 to 61: 9%
Aged 62 to 64: 22%
Aged 65 to 69: 43%
Aged 70 to 74: 58%
Aged 75 to 79: 65%
Aged 80-plus: 70%

Source: Social Security Administration, Income of the Population 55 or Older, 2012

Who Claims at 62?

Percentage of men who claimed early Social Security benefits at age 62, by birth year...

1920-24: 52%

1925-29: 56%

1930-34: 57%

1935-37: 55%

1938-42: 50%

1943-44: 45%

Source: The Urban Institute, How Did the Great Recession Affect Social Security Claiming?