Reality confounds the experts, as usual. Early retirement claims increase dramatically

Instead of seeing older workers staying on the job longer as the economy has worsened, the Social Security system is reporting a major surge in early retirement claims that could have implications for the financial security of millions of baby boomers.

Since the current federal fiscal year began Oct. 1, claims have been running 25% ahead of last year, compared with the 15% increase that had been projected as the post-World War II generation reaches eligibility for early retirement, according to Stephen C. Goss, chief actuary for the Social Security Administration.

Many of the additional retirements are probably laid-off workers who are claiming Social Security early, despite reduced benefits, because they are under immediate financial pressure, Goss and other analysts believe.

This trend may not end any time soon:

Goss said it remained unclear whether the uptick in retirements would accelerate or abate in the months ahead. But another wave of older workers may opt for early retirement when they exhaust unemployment benefits late this year or early in 2010, he noted.

The fact that the financial future of Social Security is bleak is no doubt a factor, too.  Why not get some of all the money you’ve put into it while you still can?

Because benefits are reduced for people who retire early, the surge in retirements should not have any long-term effect on the solvency of the Social Security system, although it will probably add to the near-term budget deficits confronting the Obama administration, Social Security’s Goss said.

Another expert prediction that will probably be upended.  How can it not affect the financial picture when you have fewer people putting money into the system through payroll deductions?  They’re assuming the economy will magically recover very soon and they will be able to continue to raid general revenue.  And if it doesn’t?  Another crisis that we can thank Congress for.

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