As the Great Resignation marches on, newly retired workers are employing a new strategy to boost their monthly Social Security checks by delaying their filing for benefits, the Washington Post reports Nov. 1.
The number of Americans retiring has increased, with retirement up 5 percent among workers ages 65 to 69. The U.S retired population grew by about 3 million during the pandemic, as incentives to leave the workforce mounted for well-off Americans. Federal stimulus, soaring market gains and home values, as well as health concerns, encouraged them to head into early retirement.
But the number of workers applying for Social Security benefits has declined significantly in the last year, falling by 5 percent compared to 2020, and marking the largest drop in two decades. Usually during periods of economic hardship, people rely more on social assistance, so these trends are seemingly counterintuitive.
Experts suggest that some retirees can make ends meet in the short-term because of federal stimulus assistance and unemployment insurance payments.
"Extended unemployment payments and pandemic relief payments have contributed to lower benefit applications," a spokesperson from the Social Security Administration’s Office of the Chief Actuary told the Washington Post.
Lauren Hersch Nicholas, PhD, an economist at the University of Colorado-Denver said: "It may be that all of the stimulus benefits were effective in keeping them from full-on deciding to claim benefits in the short term."
The longer someone delays claiming Social Security benefits, the higher the monthly check will be when a claim is made. A worker earning $60,000 annually who decides to retire at 65 would see a monthly payment increase from $1,418 to $1,550 by delaying a claim for benefits for a year.
By managing to get by in the short-term on federal assistance and insurance payments, workers can delay claiming Social Security, boosting future payments. This suggests a better than expected outcome for older Americans in the wake of the pandemic.
"This is a much better set of outcomes among older workers than we were expecting when the pandemic was starting," Dr. Nicholas told the Washington Post.