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Yahoo
2 days ago
- Business
- Yahoo
Social Security Claims Spiking — 5 Reasons To Follow Suit
There's no one-size-fits-all approach to claiming Social Security benefits. Retirees face various circumstances that impact when to take benefits. A recent surge in claims may prompt more retirees to ponder whether now is the time to begin payouts. Be Aware: Check Out: The Social Security Administration (SSA) reported an 18% increase in claims between January and May 2025 compared to the same period in 2024, according to NPR. Worse yet, the SSA recently reported trust funds will deplete by 2034, a year sooner than previously stated. Concerned Americans may want to take action now to receive benefits. Here are five reasons why. You're Concerned About the Solvency of Social Security Waiting to claim Social Security is typically beneficial for most, as monthly benefits increase for each year they wait until reaching 70. That makes spikes in claims concerning. 'Because for most individuals, it's financially smart for them to postpone claiming as long as they're financially able to,' Jack Smalligan, senior policy fellow at the Urban Institute, said to NPR. However, if you're concerned about potential insolvency, that increase may mean nothing. Claiming benefits now, even reduced, may provide peace of mind in receiving monthly payouts. Be aware, though, that if we incur a worst-case scenario, benefits may be reduced once trust funds are drained. Trending Now: You Can Grow the Funds Now Choosing to delay Social Security can be a wise move for retirees not needing the funds. After all, monthly benefits grow until you reach 70. Such people may be high-earners able to live on other resources. Increases in claims can call that strategy into question. 'The analysis in late April by Social Security Administration staff found that the uptick in Social Security claims was especially pronounced among high-earning 62-year-olds,' according to NPR. Taking benefits now may allow you to grow the money more. Work with a financial advisor to identify growth opportunities. Health Is a Concern for Your Family Health concerns are often a decision-driver in claiming benefits. Although delaying claims increases benefits, that may be fruitless for retirees currently facing significant medical concerns. Receiving benefits now may help retirees manage the rising costs of medical care. A reported 22% of people aged 65 and over have medical debt, and 44% of those aged 50-64 have such debt, according to the Kaiser Family Foundation (KFF). Getting monthly payouts now could mean the difference between indebtedness and peace of mind. You're Facing Credit Card Debt Growing credit card debt is a concern at any age. Facing it at retirement is problematic, as there may be less income to repay credit cards. More older Americans are dealing with high-interest debt, with 52% of those aged 50 to 64, 42% of those aged 65 to 74, and 35% of those over 75 facing credit card indebtedness. While a last resort option, claiming benefits now can help retirees repay debt. Paired with wise money management, receiving monthly payouts now can provide breathing room to manage other responsibilities. Cost of Living Is a Concern The rising cost of living is a concern for all Americans, but moreso for retirees, as their ability to earn more is limited. Claiming Social Security benefits now can help financially strained retirees avoid high-interest debt without sacrificing the things they need. Inflation may not be rising meteorically, but cost of living has dramatically increased in recent years. Taking Social Security now, and before full retirement age, may help strapped retirees dealing with stubborn prices that are stretching their budgets too thin. Claiming Social Security benefits is a personal decision. In some cases, it may pay to get payouts now. If you do change your mind, you can retract your claim within the first year, though conditions exist. Speak with a financial advisor if you're trying to decide whether now is the time to receive benefits. More From GOBankingRates How Far $750K Plus Social Security Goes in Retirement in Every US Region This article originally appeared on Social Security Claims Spiking — 5 Reasons To Follow Suit
New York Times
16-05-2025
- Business
- New York Times
Why Are So Many Retirees Filing for Social Security Earlier?
The morning after his 67th birthday, Marty McGowan filed for Social Security. That wasn't his original plan. He had intended to wait until he was 70 to claim benefits, in exchange for a heftier payment that would have yielded an extra $800 a month. But like other retirees in recent months, he was watching the Trump administration's shake-up at the Social Security Administration during a time when the broader economic outlook appeared increasingly uncertain. Concerns about the economy and access to benefits nudged him to file earlier than he had anticipated, even if it might cost him over the long run. He wasn't the only one: An additional 276,000 retirees claimed benefits on their earnings record this fiscal year through April, according to the Urban Institute, a research group, a 13 percent jump from the same period a year ago. Officials inside the Social Security Administration called the rise 'dramatic,' and though there were some other reasons for the surge, program experts say anxiety appeared to play a meaningful role. 'It is worrisome because for most people, claiming early is not a good decision,' said Jack Smalligan, a senior policy fellow at the Urban Institute. 'They're nervous about the threats to the Social Security Administration and their benefits, while simultaneously looking at their 401(k), if they have one, and worrying about that.'
