From Bloomberg News:
The rate of growth in retired Americans who collect Social Security has slowed down sharply, and the drop may be due in part to the disproportionate number of deaths from Covid-19 among the elderly.
The number of people who received retirement benefits from the Social Security Administration rose 900,000 to 46.4 million in March, the smallest year-over-year gain since April 2009.
While the Office of the Chief Actuary at the government agency said it is still too early to assess the impact from Covid-19, the year-over-year change appears to reflect excess deaths. About 447,000 people who died from the virus were 65 or older, according to data from the Centers for Disease Control and Prevention, or about 80% of total deaths. ...
I'm with the Office of Chief Actuary. Deaths among retirees may not be the only thing going on. Remember that the number of SSI claims filed is down sharply. That is widely attributed to field office closures. There could also be a slowdown in the number of retirement claims filed due to field office closures. We know there's a slowdown in processing people onto benefits after claims are taken which would have the same effect. Also note that the weirdness in the chart in 2001 and 2002 with no Covid-19 to explain it.
I can think of a few things that might have an impact as well. Fear of the market during 2020 and waiting for investments to recover before retiring. Work from home, not dealing with the in office day to day hassles and people or commute. Zoom instead of travel extending careers.
ReplyDeleteI think there are a lot of moving parts, one may be the closed field offices, but most retirements are done online now in a matter of minutes. Those will be more in the future as we move into later Boomers that are more comfortable with computer use.
In addition to the points raised in the article and post, I expect the sharp economic shock could have delayed some people from filing for retirement, either by upsetting planned retirement due to loss of income and/or sudden medical expenses.
ReplyDeleteThe article explains the increase around 2000: "In the early 2000s, the bump in beneficiaries was likely tied to the Senior Citizens’ Freedom to Work Act signed into law in April 2000, according to Teresa Ghilarducci, an economics professor at the New School for Social Research in New York. The law reduced penalties for beneficiaries who continued to work. The monthly data show 300,000 people claiming Social Security in May 2000."
ReplyDeletealternately, the wide availability of employment and increased wages made retirement less attractive for many
ReplyDelete@10:36
ReplyDeleteEmployment and increased wages were wildly available in mid 2020?
This is a chart showing the number of retired beneficiaries by age from 62 to 99 and over broken down by age in one year increments. https://www.ssa.gov/oact/progdata/benefits/ra_age202012.html
ReplyDeleteThis is as of end of 2020. I have tried to find the same chart for end of 2019 but could not do it. Comparing one to the other, we could see just how many people have died for each age year and if we used a few years back, we could also get a pretty good picture of how many "excess deaths" there were in 2020, presumably due to Covid for the most part.
I suspect there are more deaths that have been commonly reported. I think i saw a recent note from the Actuary office to the effect that it may well be that Covid deaths will extend the solvency date for the Old Age Survivors fund and that the disability fund, given the severe drop in claims and approvals is now solvent for many years past the old age fund.
@12:28
ReplyDeleteThe solvent date changes on a whim, usually to justify either cutting benefits, raising taxes, etc. As I recall, the last time it changed was because they admitted they realized they could not accurately estimate the average life span of beneficiaries in the future.
@309PM When exactly was the last time Social Security benefits were cut?
ReplyDeleteI guess those retirement numbers will go up when SSA opens the offices and everyone retires like they threaten all the time.
ReplyDelete@3:10
ReplyDelete3:09 here. Every year benefits are cut due to insufficiencies in the cost-of-living adjustment formulas. If you are advocating for an across the board reduction in benefits due to offset any perceived weakness in the trust funds, no. The last time the trust funds balance actually decreased was in 1981. Those crying that the trust funds are somehow insolvent are relying on a decrease in the rate of GROWTH of the trust funds, and claiming this trend will continue into the future at which point the trust funds would be depleted and a ~20% benefit cut would be necessary, ignoring the fact that it has been consistently shown that these estimates are never accurate as it gets adjusted literally every year, to be a further year or two out. Also, it ignores the fact that retirees (who vote OVERWHELMINGLY in their interests), would vote any politician out of office who chose to take their SSA benefits, as opposed to raising taxes and/or cutting other government programs. It's a non-issue.
https://www.ssa.gov/policy/docs/statcomps/supplement/2020/4a.html
Cut the benefits. Boomers didnt want to pay then and shouldnt get paid now.
ReplyDelete