« | »

Early Retirees Straining Social Security

From a suddenly concerned Associated Press:

Early retirements strain Social Security system

By Stephen Ohlemacher, Associated Press Writer Sun Sep 27

WASHINGTON – Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that’s happened since the 1980s.

The deficits — $10 billion in 2010 and $9 billion in 2011 — won’t affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.

Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn’t expect the increase to be so large.

What happened? The recession hit and many older workers suddenly found themselves laid off with no place to turn but Social Security

The share of U.S. residents in their 60s either working or looking for work has climbed steadily since the mid-1990s, according to data from the Bureau of Labor Statistics. This year, more than 55 percent of people age 60 to 64 are still in the labor force, compared with about 46 percent a decade ago

Nearly 2.2 million people applied for Social Security retirement benefits from start of the budget year in October through July, compared with just under 1.8 million in the same period last year.

The increase in early retirements is hurting Social Security’s short-term finances, already strained from the loss of 6.9 million U.S. jobs. Social Security is funded through payroll taxes, which are down because of so many lost jobs.

The Congressional Budget Office is projecting that Social Security will pay out more in benefits than it collects in taxes next year and in 2011, a first since the early 1980s, when Congress last overhauled Social Security.

Social Security is projected to start generating surpluses again in 2012 before permanently returning to deficits in 2016 unless Congress acts again to shore up the program. Without a new fix, the $2.5 trillion in Social Security’s trust funds will be exhausted in 2037. Those funds have actually been spent over the years on other government programs. They are now represented by government bonds, or IOUs, that will have to be repaid as Social Security draws down its trust fund

The same article that claims more people are retiring early than since the 1980s also says: 

The share of U.S. residents in their 60s either working or looking for work has climbed steadily since the mid-1990s, according to data from the Bureau of Labor Statistics. This year, more than 55 percent of people age 60 to 64 are still in the labor force, compared with about 46 percent a decade ago…

So which is it?

Meanwhile:

Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn’t expect the increase to be so large.

So disability claims have also gone up 20% because of the recession?

How does that work?

This article was posted by Steve on Sunday, September 27th, 2009. Comments are currently closed.

10 Responses to “Early Retirees Straining Social Security”

  1. Liberals Demise says:

    “WE ARE BROKE!”

    Still they will rob me a few more years just to tell me that there is nothing for me.

    We can partially blame the monies being sucked away by illegals in the system and totally blame the “PIGS” in D.C. for allowing this to happen.

    My loathing for politicians (lawyers) has increased to a downright hate on both sides of the aisle!!
    Bastards!!

    • JohnMG says:

      Well, LD, I started drawing mine this year even though I can’t afford to retire. The net result of that is, I can only earn an additional $14,100, or face the reality of paying my S.S. benefit back to the government. And, I still have to pay withholdings (both halves–I’m self-employed) on that 14K, plus pay taxes on the retirement benefit. Why am I drawing now? On the advice of my accountant, who said I should get established on the rolls before it’s too late.

      What a country, huh?

    • Liberals Demise says:

      Hey bro ……does that include a tin cup, chair and handful of pencils?

      Screwing us Vets yet again!

      “No Hope ……….. pocket Change”

    • JohnMG says:

      Can’t remember who said that the American people would never adopt communism/socialism all at once, but would accept it’s tenets incrementally until one day they would wake up under that form of government. We’re knocking on that door right now, and the young folks haven’t a clue it’s happening.

      And yes, you’re correct, you and millions more (and me too) are forced to continue to pay into the most egregious, legal Ponzi-scheme ever devised with little hope of full recompense. But hey, we’re in the process of spreading the wealth around, aren’t we?

    • Liberals Demise says:

      We are fortunate that in these waning days of our usefulness in the job market, we can still contribute to the “Black” abyss. Goodness knows …. we may well be the “First” generation to be offed for the good of the others.

      According to DingleBarry ……….. we owe this too!

    • proreason says:

      “the most egregious, legal Ponzi-scheme ever devised”

      Medicare is much worse, because there isn’t even a hint of a cap on what get’s paid for.

      Social Security can be fixed with a stroke of the pen, forever, in a way that is perfectly logical. The age at which a person can collect benefits should simply be raised to match the age-span and demographics of the country. Since the people who have paid in for decades did so with an implied contract, they should be kept whole with the expectations they bought in with. But the retirement age for people who are far away from retirement should reflect their probable lifespan. There should be a provision for annual adjustments of the retirement ages of new joinees, based on the latest acturial estimates.

      Medicare could theoretically be fixed the same way, but the shortfall between the benefits one could receive vs the benefits people would expect are so far apart that the whole ponzi scheme is irrevocably broken. The only way to save it is probably to privatise it. Free markets would solve the problems in about a decade.

      So what are we doing….well natch, the worst conceivable thing…..expanding Medicare, and not touching Social Security.

      But of course, my comments are from somebody who would like to see the country continue to thrive.

      And the people in charge of the country want to destroy it and set themselves up as an aristocracy that can never be deposed..

  2. bill says:

    Get yours before it’s all gone. Avoid health care prison …

    I am sure the unemployment didn’t have anything to do with it, aren’t you?

    And why wouldn’t Social Security solvency be the number one concern, instead of trillions more into the breach? How will we pay for SS, the money in the lock box has already been spent.

    Well I suppose that would mean we would have to elect responsible adults, instead of leftists power hungry idiots, for that to be the big problem that needs addressing right away… Instead of the next ginned up Oba-Mao crisis.

  3. proreason says:

    “So disability claims have also gone up 20% because of the recession?

    How does that work?”

    Jobitus Interruptus – a disease prevalent in Blue States. Generally related to a condition encouraged by Blue State governments – lazyassitis.

  4. ravencottage says:

    359 days until I have to deal with this. Wish me luck.

  5. canary says:

    Obama said he was going to change the retirement age at the MO townhall, or else there won’t be money to pay our soldier’s.


« Front Page | To Top
« | »