Social Security strained as jobless retire early
Filed under: Economy, Investing
Older workers, it seems, can't catch a break. First, declining stock prices and home values shriveled their nest eggs. Now, those who have lost their jobs and elected to retire early are putting a strain on Social Security.For the first time since the Reagan era, the safety net for the nation's elderly will pay out more than it collects in taxes to the tune of $10 billion next year and $9 billion in 2011. With $2.5 trillion in surpluses in its coffers, the outlays won't bankrupt Social Security. But the amounts do get tagged onto the nation's ballooning federal deficit, which is expected to reach $1.58 trillion by September 30, the end of the government's fiscal year.
Nearly 2.2 million people applied for Social Security retirement benefits from start of the budget year in October through July, compared with just under 1.8 million in the same period last year, an increase of 23 percent, according to the Associated Press. Disability claims have climbed 20 percent. Though increases were anticipated by agency officials as the vast baby-boomer generation nears retirement age, the number of applications has outpaced expectations.
"A lot of people who in better times would have continued working are opting to retire," Professor Alan J. Auerbach told the Associated Press. "If they were younger, we would call them unemployed," said Auerbach, who teaches economics and law at the University of California, Berkeley.
The recession is also pushing up the number of claims for disability benefits. In a typical year, some 2.5 million Americans seek disability benefits through Social Security, said Stephen C. Goss, the Social Security Administration's chief actuary. Those applications are expected to hit 3 million by September 30, Goss told the AP.
Some 51 million Americans receive retirement, disability or survivor benefits through Social Security. The average monthly benefit for retirees is $1,159, according to the agency's web site. Disabled workers receive an average $1,062 a month, based on June data.
As bad as things may seem, Social Security is set to get back on track in 2012, but is projected to resume deficits in 2016 unless Congress acts to fix the program, as it did in the 1980s. Early in that decade, faced with a short-term financing crisis, lawmakers, urged by President Ronald Reagan, made numerous reforms that included raising the age at which Americans qualify for retirement benefits.
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Reader Comments (Page 1 of 2)
9-28-2009 @ 1:00PM
Dennis said...
This is all the results of this country outsourcing jobs...that's where 97% of our problems arise from....good jobs sent out of our country..nothing paid into social security..and of course...let's not forget the government using it for their private piggy bank,and of course...from medicare to medicaide ..all these illegals "sucking off it" also..so there you have it...go ahead America..continue to outsource jobs..because we are afraid of our trading partners taking venegance on us...we'd rather become a third world country!!!
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9-28-2009 @ 6:01PM
Paul said...
Outsourcing jobs did cause this mess, but look at the huge penions coming out of Federal, State and Cities, how can you make twice as much money by retiring?, we have a problem, today college means very little, besides not finding work these grads are faced with education debts, we never learned from the last depression
9-28-2009 @ 1:16PM
Chuck said...
Social Security has been changed from its origianal concept so many times because it looked like the money would go on for ever. The politicians will never understand that money comes from the taxpayer and is not generated by the government. Government absorbs wealth it never creates wealth. Keep it up people, keep voting the gift givers into office and help destroy the greatest country in the history of the world.
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9-28-2009 @ 6:06PM
Paul said...
Social Security was a disabilty insurance if you were unable to work because of a medical problem, then it became a retirement plan, now they will face a mountain of debt because the seniors are now retiring, workers do not pay into the system enough money to pay these seniors, so here we go, more debt
9-28-2009 @ 2:36PM
jason said...
simple solution all these billions of dollars they gave to corporation should have funded social socuity raise how much you get each month or lower the age of it, then in return people would retire and allow new jobs to be open and the retirees happy
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9-28-2009 @ 1:28PM
susan said...
early retirement isnt doing this ...it is allowing people who have never paid one dime in to draw it out...outsourcing and the lack of concern for the american workers welfare is the issue....if there were jobs we would be working now
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9-28-2009 @ 4:00PM
Jackie said...
thank you susan for not being afraid to speak the truth, if the jobs were out there we would be working. young adults just graduating college can't get jobs your either over or under quailfied. next over 50 forget it too, your to old. please keep talking and making us think also...thank you.
9-28-2009 @ 2:09PM
Arnie said...
What we are really witnessing, is the EMPLOSION of Capitalism as we know it.
I lay the blame on greedy, Wall st "entrpenuers" and a-holes like Madoff,et,al, and those who knew and know still what is going on, and to to hell with hard working Americans who believed they where doing the right thing.
It's the system stupid!!!!!!!!
Can't just blame the Jews this time can we? although some will still try, and in fairness some Jews are guilty.
Wake-up.
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9-28-2009 @ 2:25PM
jackisbackprt4 said...
Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that's happened since the 1980s"====So its happened before and Social Security and its benefactors survived. Also, since it seems a majority of people are taking early retirement benefits, it would seem less of a strain had this these people waited for full retirement benefits. Then what about the replacement factor of Social Security retirees who become deceased. I think for the most part or to some degree, the demand for Social Security becomes offset by the above. Also, Bush and his regime did a terrible thing to Social Security by plundering it and not having the decency to put in place a method of repayment upon the end of their repuke administration. Had the repukes not had their way with Social Security, the funds would no doubt be there to cover any increase in demand for benefits. So what is the solution? Currently employment is at about 90%, therefore, Social Security will always be generating tax revenue to some degree.
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9-28-2009 @ 2:13PM
chill said...
exactly susan!!!. we take care of everyone that escapes from somewhere else and give them money and medical. we who have anything to speak of and are out of work and are ovet 50 cannot get any help. what's up with that?//i have worked and raised 2 kids by myself, paid taxes and i cannot quailify for help.. i had manager job. i have skills. cannot get a job. they say no discrimination. my behind!!! I also pay for my own medical insurance which is a joke. ins is a scam.
i'm 61 1/2 and about to join the retiries club.
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9-28-2009 @ 2:14PM
jackisbackprt4 said...
Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that's happened since the 1980s"====So its happened before and Social Security and its benefactors survived. Also, since it seems a majority of people are taking early retirement benefits, it would seem less of a strain had this these people waited for full retirement benefits. Then what about the replacement factor of Social Security retirees who become deceased. I think for the most part or to some degree, the demand for Social Security becomes offset by the above. Also, Bush and his regime did a terrible thing to Social Security by plundering it and not having the decency to put in place a method of repayment upon the end of their repuke administration. Had the repukes not had their way with Social Security, the funds would no doubt be there to cover any increase in demand for benefits. So what is the solution? Currently employment is at about 90%, therefore, Social Security will always be generating tax revenue to some degree.
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9-28-2009 @ 2:22PM
mare said...
PREHAPES, SS. NEEDS TO CHECK ON THOSE ON SS DIABILITY. I BET THERE ARE MILLONS ON THE DIABILITY , THEY CAN STII DO SOME KIND OF WORK.YOU BE SUPRISE HOW PEOPLE REALLY KNOW HOW TO WORK THE SYSTEM .ALL SO, NO ONE SHOULD BE ABLE TO RETIRE UNTILE THERE FULL RETIRMENT AGE. 65, SOME GO OUT AT 62, JUST TO GET THE MONEY.BUT LETS NOT BLAME THE SERORS, MONEY HAS BEEN USED BY GOv, OVER AND OVER. ITS NOT THERES, EACH PERSON WHO HAS WORKED ALL THERE LIFE, PAYS INTO IT, SO IT REALLY BELONGS TO THEM.NOT GOV,THE ILLIGAS GET IT, THE GOV HAS A SPECIAL PLAN FOR ILLIGAS, THEY EVEN GIVE THEM ASIGN SS NUMBER. BET MANY OF YOU DONT KNOW THIS. LOTS OF STUUF YOU DONT KNOW ABOUT GOV< WHEN IT COMES TO YOUR HARD EARN MONEY.
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9-28-2009 @ 2:27PM
Busguy45 said...
Stop allowing illegal aliens to collect SSI....The liberals like Pelosi and Frank are destroying this country
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9-28-2009 @ 2:27PM
Michael W Canady said...
The Social Security Administration Is Denying Me Additional Credits For Millatary Service, From Sept 20, 1966 To Sept 14,1968.
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9-28-2009 @ 2:43PM
margaret said...
By the time they rob us blind, they should shut the SSA down and make an agency that can work for those who have earned SS. Because I worked for the Federal Government for over 30 years, they offset my Social Security (this was a Ronald Reagan idea) - i.e., they take 2/3 of it away from me before I ever see it. Recently, I got a letter from them - their letters are cryptic in nature, saying that they were correcting my record back to 2006 when my husband died and they were increasing my payment and also adding $27 to my most recent payment. Now the good part - when I received my social Security for the month of September, I received the $27 but not the rest of the payment. I've talked to 2 people who understand my problem; but the rest of them that I talked to, say that $27 was all I am supposed to get and one idiot even said he didn't understand it. Later, I found out that he noted the account that I wanted a full explanation of the account. NOT SO. No wonder I can't get any real help. Like - what about my regular payment which should have been there along with the $27? They have no clue and I have no option other than to see an attorney as I can see this going on and on and on. They are too stupid to look at the record, like the 2 that did, and correct it. The 2 people who did help me tell me that I WILL get a payment - but when?
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9-28-2009 @ 2:43PM
Don said...
In Scottsdale AZ, there is an ultra exclusive country club that hires help from the Philippines. Unemployment is high in Arizona yet companies are allowed to hire cheaper labor to save a buck.
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9-28-2009 @ 2:51PM
CherAz said...
Not to mention we hire heavily from across the border. Green cards count. Nobody gets past minimum wage. A job over ten an hour means somebody has a real TRADE. Gee, imagine that!
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9-28-2009 @ 2:51PM
Dan said...
Blaming illegals has been a favorite for both parties for health care costs, but the numbers don''t pan out when you find out that most of the emergency room visits are by legals who don't have health care. It's a fact and is the one of the main reasons we need medicare part e, for everybody.
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9-28-2009 @ 2:52PM
Kate said...
I have a friend who is 54 years old and weighs 300 lbs. He filed for FULL Social Security benefits for being disabled. I told my friend he is not disabled; he is obese! All his health problems are associated with his morbid weight. We need to stop allowing people to abuse the SS System. And that goes for our government as well. We need to kick those individuals receiving SS disability who are not disabled off the free money chain.
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9-28-2009 @ 2:54PM
CLAUDE LEWIS said...
WHEN REAGAN WAS IN HE BIT THE BULLET AND BALANCED SOCIAL SECURITY BUT REA GAN WAS A REFORMED DEMOCRAT WILL THESE FOR CHANGE DEMOCRATS LIKE OBOMA DO WHATS GOOD FOR THE COUNTRY OR WILL THEY SIT AROUND LIKE IDIOTS AND CROOKS AND LET THIS COUNTRY BECOME A THIRD WORLD COUNTRY WE THE PEOPLE WILL VOTE THEM OUT IF THEY DO
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