Retirement & Financial Planning Report

Several work-related factors influence when people claim Social Security benefits, according to a GAO report that said a major motivation seems to be an individual’s assessment of his or her ability to continue working at older ages.

Under Social Security, participants may claim benefits as early as age 62, although with a reduction for doing so before their full retirement age, currently 66. In addition, those who claim benefits before that age and who have employment-related income are subject to an offset of their Social Security benefits. There is an add-on to a “full” benefit for those delaying past that point, up to age 70. The formula is designed so that a person living out the average life expectancy from the point of starting benefits would receive about the same lifetime amount regardless of the age chosen within that range.

About 32 percent of men and 38 percent of women claim benefits as early as possible.

GAO found that those who worked in physically-demanding blue collar jobs were 55 percent more likely to claim benefits prior to their full retirement age compared to those in all other occupations after controlling for other factors. Those who were out of the workforce or had longer work histories by age 60-62 were also significantly more likely to claim early.

In addition to work-related characteristics, other factors, such as having poorer expectations of living to age 75 significantly increase the likelihood of claiming early. In addition, those who delay claiming until their full retirement age tend to have greater income and wealth in retirement and thus rely less on Social Security for retirement security than those who claim earlier.