As the baby boomer generation reaches retirement age, U.S. policymakers are struggling to ensure the long-term viability of Social Security. In 1990 there were roughly five people of working age for every retiree; by 2035, that ratio is expected to diminish to three to one, according to the 2011 Social Security Board of Trustees report.
A 2011 report from the Congressional Budget Office and the Social Security Administration, “What Can We Learn From Analyzing Historical Data on Social Security Entitlements?” examines the age at which individuals first apply for retirement or disability insurance benefits by birth year (“age at entitlement”) to determine retirement trends, related economic circumstances and the effects of program rule changes on benefits.
Key study findings include:
“More than 54 million Americans received Social Security benefits at the end of December 2010. Over 37 million beneficiaries were retired workers and their dependents, more than 6 million were survivors of entitled workers, and over 10 million were disabled workers and their dependents.”
In 1999, more than 58% of Social Security applicants were 62 years old, and 16% were 65 years old; by 2008, 51% of applicants were 62 years old and nearly 26% were 65 years old. This came about because of the upward adjustment of the age necessary to receive full retirement benefits and the larger benefit reduction for those retiring at age 62.
According to 2008 data, more women (54%) retired at 62 than men (49%). While fewer women than men (21% vs. 29%) retired at age 65 that year, more than three times as many women (2.7%) than men (0.8%) retired later in life, at age 70 or older.
The American public’s decisions on retirement have conformed to new minimum-age requirements by the Social Security Administration. “Examining numbers of new entitlements by month of age for more recent cohorts reveals that age-at-entitlement patterns have paralleled [full retirement age policy] changes.” For instance, the typical retirement age in the 1940s rose parallel with incremental increases in the retirement age.
Claims for disability insurance typically peak at ages 50 and 55, when screening guidelines change and expectations are lowered for finding alternative forms of work. Additionally, initial disability insurance entitlements “generally rise during times of economic recession, as in 1974-1975, 1991-1992, and 2001-2002.”
The authors conclude, “As the United States faces the challenges of entitlement growth going forward, better understanding of why people seek Social Security benefits at different ages will help guide program changes.”