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More Retirees Are Taking Their Social Security Benefits at 62 Out of Fear - Fortune.com
It is public knowledge that Social Security is facing potential benefit cuts of up to 22% in 2032. If Social Security combines the OASI portion of the Trust Fund with the DI portion, it could stay solvent through 2034.
Marsha Sheldon, a Social Security advisor and President of the National Association of Social Security Analysts (NARSSA), discussed this issue in an interview with Fortune Magazine. She said she has been talking with her advisors about the growing number of people taking their benefits at 62 because they are afraid they will be cut in the near future. She remarked, “This survey tells us that many Americans aren’t necessarily claiming Social Security early because it is the best financial decision for them. Instead, they are claiming based on uncertainty about the program’s future. When nearly three-quarters of clients are considering claiming before benefits potentially change due to the pending insolvency of the Social Security Trust Funds, it shows how strongly fear and confusion are influencing one of the most important retirement decisions they will ever make.”
The Advisors at the AMAC Foundation deal with this same type of thinking daily. This is definitely not a good reason to make your decision on when to start your Social Security benefits. People born in 1960 or later take a 30% permanent reduction in their benefits when they take them at 62! Just think: if this were to really happen (and we don’t think it will), that would be a total 52% reduction to your Social Security benefit for the rest of your life. If you are married and have the highest benefit, this reduction will be passed on to your surviving spouse.
Social Security can never go broke as long as people work and pay into it. This is not the first time Social Security has been in trouble; it happened back in the 1980’s, when a bipartisan Congress worked together and made changes to keep Social Security solvent for another 75 years. However, it isn’t panning out, and it’s time for Congress to make further changes. The main factor driving insolvency is the decrease in workers relative to recipients.
Nick Lichtenberg has written an article about this interview. Read the entire article here ….
If you would like to consult with an AMAC Foundation Social Security Advisor, email your questions to ssadvisor@amacfoundation.org or call and speak with one at (888)750-2622
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