A new study from the Center for Retirement Research at
Boston College—titled Trends in Social Security Claiming —finds that,
in 2013, 36% of men and 40% of women who turned 62 claimed Social Security.
Sixty-two is the youngest age at which most people become eligible for
benefits. Those figures differ significantly from the numbers published by the
Social Security Administration, which estimated that 42% of men and 48% of
women who claimed retiree benefits in 2013 were 62.
Claiming benefits at older ages increases the size of the
monthly benefit and may provide greater protection against running out of funds
late in life. In addition, delaying the start of benefits produces a bigger
survivor benefit for a widow or widower. Why the difference in the two sets of
numbers about early filing? The answer, according to the Center for Retirement
Research, is the “cohort effect.”
In short, there are two ways of looking at claiming behavior
among people who become eligible for Social Security: claim-year data and
cohort data. The former, which are released annually by the Social Security
Administration, show—of all workers claiming benefits in a given year—the
percentage who are age 62, 63, 64, etc.
The difficulty with this approach, according to the Center
for Retirement Research, is that “when the size of the group turning age 62 is
increasing, as it has over the last two decades, the data will show that
62-year-old claimants make up a larger portion of total new claimants in a
given year—even if a smaller percentage of 62-year-old workers claim
immediately.”
Thus, a better approach, according to the center, is to use
cohort data—looking at the size of specific age groups, or cohorts, and how the
size of those groups is changing. Using unpublished data from the Social
Security Administration on people eligible to claim retired-worker benefits by
birth year, the Boston College study found large increases in the number of
eligible beneficiaries turning 62, starting around 1997.
The “good news,” according to the Boston College study, is
that more people are claiming retired-worker benefits at later ages. Still, more
than a third of insured workers still claimed Social Security benefits as soon
as they became eligible,” the study notes.
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