Is Retiring Early Putting Too Much Pressure On The System?
Posted by ftcom in : Economy , add a commentBecause of the thousands of lost jobs and an increase in early retirement claims due to laid off workers, Social Security (S.S.)has a an extensive struggle ahead. Not only is S.S. on the path to bankruptcy, but now more than ever seniors are seeking social security. S.S. at this time and over the next two years will give out more in benefits than it collects in payroll taxes.
Retirees added to the fund during their working lives and now it’s failing them. Between 2010 and 2011 estimates forecast the bills will reach $19 billion. These shortcomings won’t affect the payout that seniors are getting but they will add to the federal deficit.
Since the recession, S.S. officials have acquired 23 percent more applications for retirement benefits and 20 percent more for disability claims. Officials projected these claims to rise because of the growing numbers of baby boomers that are reaching retirement age. Although with the economy the way it is, officials have seen thousands more applications than they predicted.
These ever increasing numbers have an explanation behind them. Some of the first workers to be laid off were potential retirees. As a result they decided to retire, when they might otherwise have continued working.
However, the recession has forced many other possible retirees to remain working. Many saw their nest eggs disappear before their eyes and now they have to work and try to save up once more, with retirement age rapidly approaching.
Regrettably, many seniors are facing the decision of whether to accept social security or not. Some are trying to put it off as long as possible and find other jobs, because the longer they delay taking S.S. the higher their monthly check will be.
Even though many workers want to put off their S.S. benefits, they are struggling to find work. With limited occupations, and lots of workers on hand, many employers hiring younger workers. So these baby boomers are not only competing against young college graduates, but also young professionals that have families to support.
Most retirees are able to pay nearly all of their bills, but it can be difficult if they have lots of prescriptions and no health insurance. Most seniors want to remain working so they have more money than just what they need in order to pay bills.
Over 2.2 million people put in for retirement benefits from October through July and at the same time the year before it was 1.8 million. This means premature retirements are not only hurting the nation in the right now but also the long-run.
Social Security will have run out of funds by 2037, because of the way it was established. Unless Congress acts: the program is going to dwindle. Over 43 million retirees and 9.5 million disabled Americans are dependent on Social Security. The system will not be able to support them and future retirees unless Congress makes some changes.
Diane Johnson graduated with a Bachelor of Science from the University of Utah and enjoys writing about current events, politics, college degrees, education online, and the office.