As a possible metric of an improving economy, the Urban Institute announced Monday that fewer workers aged 62 and older applied for Social Security retirement benefits in 2011, possibly because of improved working opportunities.
Or, as the researchers note, because pension plans have disappeared and many over 62 realize they need to continue to work to make retirement a more financially insulated process.
Just 27 percent of older workers began collecting their benefits last year, which is the lowest rate since 1976.
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"The trend reflects changes in Social Security that increase work incentives at older ages, the shift away from employer-sponsored pensions and better educational attainment among older adults," said Richard W. Johnson, director of the institute's Program on Retirement Policy.
Johnson said that as has been the case since the 2008 economic meltdown, high unemployment generally increases the share of 62-and-older Americans who start their Social Security payments early as a tool of income support.
Doing so, Johnson points out, can jeopardize those recipients' long-term financial stability, as monthly payments are 25 percent less when claims start at 62 versus 66.
The retirement benefit take-up rate, the number of new retirement claims divided by the number of those aged 62 and over who've not yet started collecting benefits, reached 30.8 percent, up from 21.7 percent in 2007.
At the same time, applications for Social Security disability benefits are unusually high, with 18.9 insured workers per 1,000 in the U.S. population applying for those benefits, more than any year in the disability program's 55-year history, except 2010.
"The weak labor market undoubtedly prompted the surge in disability applications and awards since 2009, as workers with health problems are more likely to turn to disability benefits when jobs are scarce," Johnson adds.
That upsurge in disability claims has also intensified Social Security's financing problems. Disability benefit payments increased by 29 percent between 2007 and 2010, to $124 billion, as payroll tax revenue dropped 3 percent at the same time, due to high unemployment.
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