This article reports on the jump in the number of people seeking early Social Security retirement benefits compared with last year. The subhead and first paragraphs of the article describe this as surprising given the large losses in stock and home equity suffered by older workers. In fact, the surge is totally predictable given the state of the job market. Many older workers are being forced out of jobs and having difficulty finding new jobs, so it is totally reasonable that they would look to start collecting their Social Security benefits as a means to support themselves. Collecting benefits does not mean that people have stopped working. Workers can earn up $14,160 a year and still collect full benefits. This would be equivalent to 20 hours a week of work at $14 an hour. Many older workers will receive wages considerably less than this. Furthermore, many workers may not disclose their full pay in order to avoid the earnings penalty. (50 cents of benefits is deducted for each $1.00 of earnings for workers receiving benefits who are under age 66, the normal retirement age.)
--Dean Baker
