A Social Security Bridge Option Would Help Reduce Early-Claiming Penalties For Those With Retirement Savings

Teresa Ghilarducci
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Teresa Ghilarducci: Schwartz Center for Economic Policy Analysis (SCEPA), https://www.economicpolicyresearch.org

No 2023-04, SCEPA policy note series. from Schwartz Center for Economic Policy Analysis (SCEPA), The New School

Abstract: The Social Security benefit structure penalizes people who claim before age 70. Yet over one-fifth of eligible people claim before their full retirement age (age 67 for those born in 1960), and over 90 percent claim before the maximum age of 70, resulting in reduced monthly benefits. While many claim early out of necessity, financial advisors often recommend to those with retirement savings to spend down their savings before tapping into Social Security to increase their lifetime monthly benefit. However, few people have professional advisors. A Social Security Bridge option that is formalized, accessible, and easy to understand would allow beneficiaries to boost monthly benefits and help protect against downward mobility in retirement. This bridge, while important for many, is not a relevant for those with little to no retirement savings. Thus, we also advocate for increasing the Social Security minimum benefit to ensure adequate lifetime retirement income for the over 63 million Americans who will retire without any retirement savings.

Keywords: Social Security; Workers; Jobs; Older workers; retirement; retirement savings; retirement age (search for similar items in EconPapers)
JEL-codes: E21 E24 I14 J32 J38 J62 J83 (search for similar items in EconPapers)
Pages: 11 pages
Date: 2023-11
New Economics Papers: this item is included in nep-age and nep-pbe
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