Sunday, June 10, 2012
Many more people start social security benefits at 62 -- with long term unemployment, they have to
Motoko Rich has an important front page story in the New York Times, Sunday June 10, “Forced to early Social Security, unemployed pay a steep price”, link here.
The narrative relates the experience of a woman who lost her job in advertising in southern California (after her employer lost two big accounts in one week), couldn’t find another one, moved in with friends in North Carolina doing charity work, and then moved back to California (Palm Springs) after Hurricane Irene damage.
She barely gets by on the $1100 a month Social Security she started at 62. Her early start on benefits means they will he less by about 30% for the rest of her life.
I did the same thing, starting at 62. But my employer’s pension plan was predicated on that expectation, with the way the “social security offset” (or “bridge) had been set up by my original employer. If I live to age 77 or greater, I lose out. (I am 68 now.)
But before 2000, it was a common expectation that people would “retire” before age 60 and start some kind of consumerist or boutique second career, probably make less when doing what they “wanted”, and use social security as a financial planning tool. Now, the ethics and sustainability of that view has been questioned by calls for means testing, or delayed benefits based on accumulated wealth.
Social Security reports that early retirement claims have increased sharply since 2009. Mine started in 2005.