Cited: AP
At 63, Paul Skidmore, plans to file for Social Security benefits 3 years before retirement age. The reason is because the office he worked at is closed, his job is gone and after 18 months of searching for a job and his unemployment benefits are exhausted, he has no choice but to retire early.
It is one of the most striking fallouts from the bad economy: Social Security is facing a rare shortfall this year as a wave of people like Skidmore opt to collect payments before their full retirement age. Adding to the strain on the trust are reduced tax collections sapped by the country’s historic unemployment — still at 9.5%.
“All I want to do is work,” said Skidmore, a Maryland resident who was an insurance claims adjuster for 37 years before his company downsized and closed his office last year. “And nobody will hire me.”
More people filed for Social Security in 2009 — 2.74 million — than any year in history, and there was a marked increase in the number receiving reduced benefits because they filed ahead of their full retirement age. The increase came as the full Social Security retirement age rose last year from 65 to 66.
Nearly 72 percent of men who filed opted for early benefits in 2009, up from 58% the previous year. More women also filed — 74.7% in 2009 compared with 64.2% the previous year.
Jason Fichtner, an associate commissioner at the Social Security Administration, said the weak economy has led more people who lost their jobs to retire early. However, it also has forced some people hard-hit by the recession and in need of a bigger paycheck to push back retirement and stay in the work force longer.
“But we’re seeing more people taking early benefits than staying in the workforce longer,” Fichtner said.
Related: Out of work, out of options, into retirement
Like Skidmore, 63-year-old Jan Gissel, a California resident, also was forced into retirement early. She turned to unemployment benefits when her technical support business failed and filed for Social Security last September. Together, the checks are keeping her afloat.
“I knew I had to have an income from somewhere, and my business wasn’t giving it to me,” she said. “I just went online and, boom, three weeks later I had the check.”
Gissel wants to continue working but still hasn’t found a job. Although she didn’t expect to be cashing Social Security checks so soon, she’s grateful for the support it has provided.
“I needed it way earlier than I thought,” she said.
In the annual report of the Social Security program, released August 5, the trustees said that pension and disability payments will exceed revenues for this year and 2011, reflecting the deep recession.
The report forecast that the program would return to the black in 2012 through 2014, but that benefit payments will again exceed tax collections in 2015. For every year after 2015, the report projects that Social Security will be paying out more than it receives in tax collections as 78 million baby boomers begin retiring.
The trustees did not focus on the growth of early retirees in their report, as they don’t expect the early retirees to significantly drain funds over the long-term. Early opt-ins receive smaller monthly checks so that they aren’t projected to receive any more money over a lifetime than they would if they had waited to collect Social Security until their full retirement age.
People entitled to full benefits at 66 would receive 75% of their check if they began collecting four years early. Conversely, if they waited until they turned 70, collecting four years late, they would earn 32% more.
They would receive the decreased — or increased — percentages for the rest of their life.
“From the trustees’ perspective it’s a wash, because they calculate you’ll get the same total benefit,” said Maria Freese, director of government relations and policy at the National Committee to Preserve Social Security and Medicare.
Freese added, though, that beneficiaries generally only opt in early because they have to.
“When you retire early, you are taking a hit in your monthly check, and most people don’t do that voluntarily,” she said. “They either do that because they aren’t healthy enough to keep working or because they lost their job.”
Nora Lopez, 62, a Florida resident, retired from her job as an elementary school teacher last year and began collecting Social Security. She did so, in part, because of health problems. When her school district offered teachers the option of keeping their health insurance coverage until they qualified for Medicare at 65, she decided she could get by on her pension and Social Security.
“I wanted to work as long as I could,” she said. “But it was hard for me to do that.”
“Why should I go out there to the hustle and bustle and stress and all the stuff that’s related to work if I don’t have to?” asked Paul.
Like Jack Dixon, 63 of Florida, who stopped working full-time in April as a tour guide and trolley driver and cut back to working one day, many people just do the math and cash in early. Dixon’s wife and he decided it after she figured out they would be able to get by even on reduced Social Security benefits.
————————————————————————
My Take: It is a shame that people have to go this route just to survive financially. There are so many people that are turning to collection harassment lawyers because they can’t pay their bills because I can’t find a job. At least, those who are old enough to retire early do not have to use the services of FCRA lawyers. Hopefully, they will not have to contact the Social Security attorney either.
Those who are retiring early, however, may need to contact a tax preparation service if they are going to work part-time. I say this because some Social Security benefits are actually taxable now and that makes taxes will more complicated. That is why a CPA is good to have on your side.
Hopefully, these people that are having to retire early are taking advantage of senior financial planning in their area at community centers. They can even take advantage of a retirement calculator on various websites online. I believe they have this at this Baby Boomer Site. All you have to do is become a member and it is free to utilize all the stuff they have.
————————————————————————-
Other Resources
Margins are Strong into 2012
Much research has occurred regarding the amount of employment gains that the year experienced and while most of the businesses that are hiring and using a staffing agency have reported that they are indeed increasing their employment rolls in 2012, there are other encouraging signs that the economy is on the mend such as the fact that many companies are reporting an increase in their operating margins because they have experienced more sales. This is the way that more jobs feeds into the economy because more purchases can be made for all sorts of products from everyday items to special, more expensive purchases.
Ancient Times and Bankruptcy
In ancient times in many countries, such as Greece, the idea of bankruptcy did not exist. If a man could not pay his debts, he and his family would be forced into slavery to repay the debts until the losses were repaid. Indebted slaves often had what was termed protection of “life and limb” which was not a luxury that regular slaves possessed. Of course, in today’s world, a Rockland County New York Chapter 7 lawyer would likely not have to worry about his client facing slavery or any sort of antiquated process as modern bankruptcy laws are much different in today’s society.
Healthy Body, Healthy Mind
A Pilates workout library will allow you to choose workouts with Pilates exercises appropriate to your fitness level and Pilates videos can stream directly from your computer. You can even stream the videos through your TV set! If you find a workout that features Pilates exercise equipment that you don’t have yet, just visit a Pilates online store so that you can purchase Pilates equipment to enjoy unlimited access to free online Pilates workouts and Pilates DVDs online.
Article Rating: