CBO: More people working longer since change to Social Security eligibility age

Posted on: Tuesday, January 15, 2013

Because people are living longer and there aren't as many people contributing to Social Security, lawmakers recently raised the age at which people could retire and still be eligible to receive benefits from the entitlement program. Since that's happened, many Americans are working considerably longer and delaying the day at which they'll leave their jobs for good.

According to a recent report published by the nonpartisan Congressional Budget Office, raising the full retirement age from 65 for people born before 1943 to 67 for those born after 1960 has not only resulted in people working longer, but putting off the time in which they collect Social Security.

"That delay occurred in part because the FRA acts as a signal about when to claim benefits and also because the increase in the FRA meant that if a person started collecting benefits at age 65, those benefits would have been smaller than they would have been without the increase in the full retirement age," said Joyce Manchester, lead author of the report and chief of long-term analysis in the health and retirement division of the CBO. "As a result, people tend to work longer on average when the FRA increases."

The report also analyzed the age at which the largest percentage of people delayed retirement and Social Security benefits. CBO revealed that individuals who were 66 years of age were the most likely to postpone claiming their benefits and were also likely to stay at their jobs for a longer amount of time.

Due to the rising cost of living, this is not unusual. Similarly, it's not out of the ordinary for agents to see a fair amount of insurance leads coming from individuals near retirement. It may be wise for insurance agents to direct their customers toward an annuity, as this savings device can help supplement their income post-career.

Posted In: Insurance News, Life Insurance

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