The golden years are looking particularly golden for certain Americans who have the financial means (and desire) to retire early while deferring their Social Security benefits — something that’s becoming more common these days, thanks to the pandemic-era combination of stimulus payments, rising home values, and stock-market gains.
According to a recent Washington Post examination of government statistics, the COVID-19 economy has generated “among of the greatest incentives to retire in modern history.” At the same time, many retirees are deferring their Social Security payments in order to get larger monthly installments.
According to a WaPo analysis of Bureau of Labor Statistics data, the number of employees who filed for Social Security payments in the 12 months ended in September fell 5% from the previous year’s same period. According to the Social Security Administration, this was the largest reduction in over two decades.
Over the same time period, the number of employees aged 65 to 69 who retired increased by 5% year over year. During the pandemic, the number of retirees in the United States increased by around 3 million, which is nearly twice as much as would have been predicted before the outbreak.
According to many experts, three factors have fueled the trend: generous federal stimulus and unemployment insurance payments; larger retirement funds as a result of stock market gains and rising home values; and COVID-related restrictions that have forced seniors to apply for Social Security benefits online rather than in field offices.
“We find higher dependence on Social Security benefits during economic downturns, and we assumed that would be the case with the pandemic,” Lauren Hersch Nicholas, an economist at the University of Colorado at Denver, told the Washington Post. “The claiming statistics just don’t support that.”
The nature of the COVID-19 epidemic, which has added to both economic and health uncertainties, is another reason pushing increasing retirement rates, particularly among women.
“Health issues are unique to this recession and maybe playing a role,” Courtney Coile, an economist at Wellesley College, told the WaPo. “Especially since employees aged 65 and beyond are less likely to be able to telework than younger people.”