Retirement planning experts often bemoan the tendency of Americans to claim their benefits early at age 62. It’s a move that results in substantially reduced monthly payments that can leave retirees vulnerable to poverty in old age.
A new analysis from the Center for Retirement Research utilizes government data to assess the real rate of early claiming, and the results indicate more Americans are waiting to claim than a superficial look at the numbers would suggest. That's good news for retirement security, according to the authors, especially at a time when defined benefit pensions continue to decline in prevalence.
As the CRR research team explores, the aging of the large baby boomer generation meant that the size of the cohort turning 62 each year had been increasing substantially — a trend that held steady until only recently. As a result, the claiming data so often cited by retirement experts has likely underestimated an underlying trend toward later claiming.
The key finding is that, for years, 62-year-old claimants made up a larger and larger portion of total new claimants in a given year. So, even if a smaller percentage of those people turning age 62 chose to claim immediately, the absolute number of people claiming early was rising nonetheless. In digging deeper into the “cohort data,” the authors find strong evidence that claiming age has actually increased by about two years when controlling for cohort size. That increase, from roughly age 63 to 65, also coincides with a three-year increase in the average retirement age.
The CRR authors use a number of data sources to create a historical record of early claiming from 1985 to 2023. Over that time, despite the rapidly increasing numbers of 62-year-olds, the percentage claiming at 62 actually began to drop in 2005. The figure declined from around 60% to less than 30%.
“The problem with this figure is that the pattern is inconsistent with the fact that the uptick in work effort actually began in the mid-1990s, not in 2005,” the authors point out. “The inconsistency arises because the number of people turning age 62 started to increase dramatically in 1997, making the claim-year data look like many were opting for early claiming — the so-called 'cohort' effect.”
For data clarity purposes, according to the authors, 62-year-olds have stabilized as a share of the population. This means that the shifting sizes of age groups is not as likely to have a meaningful distorting effect on claiming comparisons going forward.
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