Studies showing that greater percentages of people are claiming Social Security benefits as early as possible can be based on misleading figures, the Center for Retirement Research has said, concluding that to the contrary, the share of those starting to draw benefits at age 62 is continuing to decline.
The age at first claiming Social Security benefits is important to beneficiaries since benefits are reduced for those claiming before full retirement age, which currently is 66; likewise, benefits are increased for delaying past that age up until claiming at age 70 (after which there is no longer an increase).
Claiming earlier than full retirement age also has implications for those who continue to work afterward, since the “earnings test” can reduce or even eliminate Social Security benefits for those who continue to have work-related income up to that point.
The report noted that the aging of the baby boom generation can cause statistics to be misleading, if the count simply involves how many people who claim Social Security in a given year at age 62 versus some other age.
Said the report: “The problem is that when the size of the group turning age 62 is increasing, as it has over the last two decades, the data will show that 62-year-old claimants make up a larger portion of total new claimants in a given year even if a smaller percentage of 62-year-old workers claim immediately.”
With a large cohort of people now hitting that age, a more accurate measure is percentages of those born in a particular yearwho begin drawing benefits at 62. Looked at that way, it said, 40 percent of women and 36 percent of men who hit that age in 2013 began drawing Social Security that year, down from 64 and 52 percent, respectively, for those who hit that age in 1985 and from 63 and 56 percent, respectively, for those who hit it in 1996.
“More people are claiming retired-worker benefits at later ages, and this pattern is consistent with increased labor force participation at older ages and the rise in the average retirement age. Nevertheless, in 2013 more than a third of insured workers still claimed Social Security benefits as soon as they became eligible. The question is whether this decision appropriately reflects the individual and family circumstances of these individuals or whether they are making a mistake,” it said.
