Tuesday, August 10, 2010

AP: Forced to Retire, Some take Social Security Early

It appears part of the mystery of "where everyone disappeared to?" as the labor force participation rate plunges is:  Social Security.   Early payments (at reduced amounts) jumped significantly for both the male and female population; strikingly high for males who have been harder hit in this recession as manual jobs disappear and the economy continues to focus on services.  In both cases, almost three quarters of people taking social security in 2009, filed early.

Please keep in mind, in America if you are not looking for work "actively" for 4 weeks you are no longer unemployed.  That fact (many discouraged workers), along with a host of other factors such as this "forced early retirement" trend is making the unemployment rate look far better than it is.  If the U.S. had a more traditional labor force participation rate, the unemployment rate would be a few % higher simply from that one factor alone.

Via AP:

  • Paul Skidmore's office is shuttered, his job gone, his 18-month job search fruitless and his unemployment benefits exhausted. So at 63, he plans to file this week for Social Security benefits, three years earlier than planned.  "All I want to do is work," said Skidmore, of Finksburg, Md., who was an insurance claims adjuster for 37 years before his company downsized and closed his office last year. "And nobody will hire me."
  • 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.   "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."
  • 63-year-old Jan Gissel of Tustin, Calif., 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.
  • 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% 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.
  • "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."

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