You read the headline right. In a scary development, the Social Security Administration reports a surge in benefit claims due to the economic downturn. We all know delaying Social Security for as long as possible will increase the amount received each year, something baby boomers will need in later stages of retirement. And of course, they're doing the exact opposite, most likely to address short-term money concerns. Combine this with the devastating effect retiring in a down market can have on an investment portfolio, and the problem compounds itself. If your clients are telling you they think it's wise to take their Social Security benefits early, straight talk and tough love are required.
From Tribune Newspapers:
For the past eight months, the government program that most American senior citizens depend on for most of their incomes has had a major surge in claims, Social Security officials said. It's an unexpected result of the economic crisis, and it has potentially severe consequences for individuals and the nation. Since the current federal fiscal year began Oct. 1, 2008, Social Security retirement claims have been running 25 percent ahead of last year, according to Stephen Goss, chief actuary for the Social Security Administration.
That's a whopping 40 percent more than the 15 percent increase that the system's actuaries had projected for Baby Boomers.