It seems people are getting the message: delay retirement and put off Social Security, and come in for a larger benefit when you do claim.
That's a study by the Center for Retirement Research at Boston College, which looked at unpublished Social Security Administration data and found that, although superficially it looks as if higher percentages of people are claiming benefits at younger ages, that's not exactly the case.
More people appear to be claiming benefits at age 62, and that's been happening for the last 20 years. But that's because that segment of the population is larger, not because the percentage of people age 62 who are claiming benefits is increasing. According to Alicia Munnell, director of the CRR, "The number of eligible participants turning 62 began to increase around 1997, rising from 829,000 in 1997 to around 1.4 million in 2013."
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While the increase in numbers began before baby boomers started to retire, Munnell pointed out in research that the larger numbers are due to an increase in births, not to an increase in the percentage of eligible 62-year-olds claiming benefits.
"This increase in the number of participants turning 62 — or 'cohort effect' — distorts the trend in claiming patterns," Munnell said in a statement.
She continued, "To accurately follow claiming behavior over time, one must look at cohort data. Such data show, of the potential claimants turning 62 in a given year, the percentage that claim benefits as soon as possible."
And that percentage is falling.
"Of eligible workers turning age 62, the share claiming benefits at that age fell from 56.0 percent in 1996 to 35.6 percent in 2013 for men; the comparable decline for women was 62.8 percent to 39.5 percent," the study said.
This is a good thing for several reasons: it postpones retirement, allows workers to contribute to their 401(k)s for a longer period, provides larger amounts of current income than would retirement money and avoids the actuarial reduction in Social Security checks, so that when people actually put in claims for Social Security they will be able to receive larger checks each month.
So people are finally facing the reality of needing more money for retirement — at least in this way.
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