Why Some Retirees Delay Social Security
Why Some Retirees Delay Social Security

Why Some Retirees Delay Social Security

As the large retirement rate continues, newly retired workers are adopting a new strategy to increase their monthly social security checks by delaying their application for benefits, Washington Post reports Nov 1

The number of Americans retiring has risen, and retirement has increased by 5 percent among workers aged 65 to 69. The U.S. retirement population grew by about 3 million during the pandemic, as incentives to leave the workforce for affluent Americans. Federal incentives, soaring market gains and housing values, as well as health problems encouraged them to retire early.

But the number of workers applying for social security benefits has fallen sharply in the past year, falling by 5 per cent compared to 2020, marking the biggest drop in two decades. Usually during periods of economic hardship, people are more dependent on social assistance, so these tendencies are seemingly counterintuitive.

Experts suggest that some retirees may survive in the short term due to federal incentive support and unemployment insurance payments.

“Extended unemployment payments and pandemic payments have contributed to lower applications for benefits,” said a spokesman for the Social Security Administration’s Office of the Chief Actuary. Washington Post.

Lauren Hersch Nicholas, PhD, an economist at the University of Colorado-Denver, said, “It may be that all stimulus benefits were effective in preventing them from deciding to claim benefits in the short term.”

The longer someone postpones a claim for social security benefits, the higher the monthly check will be when a claim is made. A worker who earns $ 60,000 annually and who decides to retire at age 65 will see a monthly payment increase from $ 1,418 to $ 1,550 by delaying a benefit claim for one year.

By coping in the short term with federal assistance and insurance payments, workers can defer social security claims, increasing future payments. This suggests a better-than-expected outcome for older Americans in the wake of the pandemic.

“This is a much better set of results among older workers than we expected when the pandemic started,” Dr. Nicholas. Washington Post.


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