Seniors are living longer and for some that means that Freedom 55 offers new opportunities. Perhaps it is time to follow a second career. Or given that you are healthy and full of vigor, you may decide to stay on longer at your existing job since the company values your experience, knowledge and skills.
That was a view that was widely discussed. Given that times were tough, delaying the retirement day also meant that increased funds could be amassed to assure a long and enriched retirement when it came. Apparently that scenario is not working out for everyone.
We now read that Early retirement claims increase dramatically according to the LA Times.
Instead of seeing older workers staying on the job longer as the economy has worsened, the Social Security system is reporting a major surge in early retirement claims that could have implications for the financial security of millions of baby boomers.
Since Oct. 1 2008. claims have been running 25% ahead of last year, compared with the 15% increase that had been projected as the post-World War II generation reaches eligibility for early retirement, according to Stephen C. Goss, chief actuary for the Social Security Administration. Many of the additional retirements are probably laid-off workers who are claiming Social Security early, despite reduced benefits, because they are under immediate financial pressure. The numbers upend expectations that older Americans who sustained financial losses in the recession would work longer to rebuild their nest eggs.
The ramifications of this change in trend are profound for the new retirees, their families, the government and other social institutions that may be called upon to help support them. On top of savings ravaged by the stock market decline and the loss of home equity, many retirees now must make do with Social Security benefits reduced by as much as 25% if they retire at age 62 instead of 66.
Society and the economy can function better as people live longer, if seniors decide to continue working or even start off a second career. They can be contributors to the economy rather than needing support.
With Americans living longer, the elderly are increasingly at risk of outlasting their financial assets. That’s a serious problem for them and their families, who are often called upon to provide assistance. The full consequences of retirement decisions made in hard times will become apparent when people who retired early begin to exhaust their savings.