Fewer older adults apply for Social Security benefits last year, but disability benefit requests still up

Fewer workers age 62 and older applied for Social Security retirement benefits in 2011, mainly because more and better jobs were available.

Only 27 percent of older workers began collecting retirement benefits last year, the lowest rate since 1976, according to the Urban Institute’s Program on Retirement Policy.

Older Americans were more likely to claim Social Security retirement benefits in 2009 than in previous years as the economy weakened, and the unemployment rate for workers age 55 to 64 rose to 6.6 percent, more than double the 2007 rate.

 In 2009, the retirement benefit take-up rate reached 30.8 percent, up from 28.8 percent in 2008 and 27.1 percent in 2007.

“Claiming Social Security benefits early sometimes jeopardizes future economic security, because early claimants receive permanently reduced benefits,” Richard Johnson, director of program, said in a policy brief. For example, Social Security reduces monthly payments by 25 percent when beneficiaries begin collecting at age 62 instead of 66.

While the number of Social Security applications has declined, more people are continuing to apply for Social Security disability benefits.

In 2011, 18.9 insured workers per 1,000 applied for Social Security disability benefits, more than any year since 1957except 2010. The disability program was launched in 1957.

The weak labor market caused the surge in disability applications.

“Workers with health problems are more likely to turn to disability benefits when jobs are scarce,” Johnson said. However, disability applications had been rising before the recession.

Population aging accounted for about two-thirds of the growth between 2000 and 2007, as many boomers entered their fifties and sixties when disability is relatively common.

Copyright 2012, Rita R. Robison, Consumer Specialist

Comments

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The break even age is about 82. If you think you are going to live longer then you are better delaying. If your health is bad, take Social Security benefits earlier, but if you make it to 65, chances are you will live much longer than 82.