Delayed on Social Security? Not Everyone Can – Center for Retirement Research

Financial advisors often encourage older workers to delay signing up for Social Security as long as possible to maximize their monthly income.

But many readers of our blog point out, rightly so, that this is not always the case for people in taxing jobs. Blue-collar workers are in a real Catch-22, caught between the unforgiving financial needs of retirement and a body that can’t do another job.

“That’s me,” a reader named George L. commented on a recent blog, “The Psychology Behind Starting Social Security at 62.” Psychology had little to do with his decision to start Social Security. “I worked hard all my life with no skills so I was ready to retire at the age of 62,” he said.

Another student, Ellis, said he knows retired truck drivers, construction workers and truck drivers.

“They just got tired at 62, and continuing to work in their jobs will be very taxing and dangerous because of the loss of skills,” he said. “Such work can take years of life.”

But for one student, financial security — that of his wife — was a major consideration in deciding when to start Social Security. David Scarborough said he earns more money than his wife and wants to make sure he has enough Social Security benefits to get married since “it’s unlikely I’ll die before she does.”

He said, “it is in both of our interests that I delay applying.”

Research shows that how much a person earns is a major factor when deciding to retire. People in physically demanding jobs, who may feel they can no longer work, also tend to earn less and may have more to gain by delaying their benefits – if they could. Workers who have the luxury of procrastination tend to be in low-paying or high-paying office jobs or doing work that energizes them, rather than exhausts them.

Dr. Edward Hoffer said: “It is easy for an accountant or a librarian to work full time until 70,” said Dr.

62 year olds who can't wait until 70

The 2021 survey reveals this deep social and economic gap, along with racial lines. Only one in five college-educated White males would not be able to work until 70. At the other end of the spectrum, three out of four uneducated Blacks did not make it that long.

While students focused on the financial issues involved, others acknowledged one psychological factor in deciding when to start Social Security: how long they expect to live.

Research posted on this blog shows that people who expect to live longer are slow to claim their benefits. The difference is between people who have the opposite view – that “life is short” – and feel that it is important to get benefits quickly and enjoy their retirement years.

“I’ve seen enough of my peers/family die in their 60s and 70s,” said Deanna, another student.

The way the Social Security formula works is that the larger checks that the retiree receives by delaying, if they live long enough, eventually make up for the “lost” years of benefits caused by waiting. Every year of delay will increase the size of that monthly benefit check by 7 percent to 8 percent, which is a large percentage. Looking to age 62 or 64 to enjoy retirement has high financial costs for people with an average or above-average life expectancy.

Brian Krech and his wife plan to split the difference. Krech, who said he has serious health problems, plans to start his benefits early. His wife will wait until 70.

“If you are healthy and have a long life in your family, it doesn’t make sense to stop looking for 70 to maximize your benefits,” he said.

But this is an option that may not work for some couples. First, both Kreches have the same benefit, eliminating the issue of needing to increase the spouse’s benefit – unlike a student who earns more than his wife. And Krech’s wife apparently has the kind of job that allows her to delay Social Security — unlike many aging workers struggling to keep up with the demands of their jobs.

“Each personal and family situation is so unique that it’s important to consider all options and reasons before claiming your Social Security benefits,” Krech said.

Each work situation is different. But the ability to work long hours is also a big part of the equation.

To learn the learn by Suzanne Shu and John Payne, see “Social Security Demand Intentions: Cognitive Identity, Loss Aversion, and Information Displays.”

The research reported here was derived in whole or in part from research activities conducted pursuant to a grant from the US Social Security Administration (SSA) funded as part of the Retirement and Disability Research Consortium. The opinions and conclusions expressed are solely those of the authors and do not necessarily represent the views or policy of SSA, any federal government agency, or Boston College. Neither the United States government nor any of its agencies, nor any of its employees, makes any warranty, express or implied, or assumes any legal responsibility or liability for the accuracy, completeness, or usefulness of the contents of this report. Reference herein to any particular commercial product, process or service by trade name, trademark, manufacturer, or otherwise does not imply or endorse, recommend or favor the United States Government or any agency thereof.

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