The number of people applying for and collecting Social Security benefits increased 19 percent this past year as a result of rising unemployment, declining savings and a large number of boomers reaching retirement age.
During the 12 months ending Sept. 30, some 2.6 million Americans began collecting Social Security benefits, up from 2.2 million during the 2008 fiscal year. Stephen Goss, Social Security’s chief actuary, said this is the highest increase ever.
New applications for Social Security retirement benefits increased nearly 21 percent between October 2008 and September 2009. According to AARP Bulletin Today, job losses and a weak labor market spurred more people who needed the money to start taking their monthly benefit, which is available as early as age 62.
“What’s going on with these people taking benefits – are they looking for a job, or working part time and taking benefits – that’s something we don’t know yet,” said Richard Johnson of the Urban Institute.
People who take Social Security benefits before the full retirement age of 66 get a reduced monthly benefit.
Sara Rix, a policy adviser for AARP, said people need to think seriously about the consequences of taking early retirement benefits and consider the options, such as cutting back expenditures or picking up a second job. “Collecting a benefit at 70 almost doubles what they’d get at 62,” she says.
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