In a Forbes column, Dan Doonan writes that the Social Security Administration (SSA) has received an unusual amount of attention this year. A new issue that has cropped up relates to a recent rise in early claiming of Social Security benefits.
Both The New York Times and The Wall Street Journal recently reported that the Urban Institute noticed a spike in people claiming their Social Security benefits, often at early ages. While several factors are cited explaining the increase, SSA staff say that much of the rise in early claiming is driven by fear about the future availability of Social Security benefits.
Unfortunately, fear-driven decision making can undermine long-term retirement security. According to the Urban Institute, claiming Social Security at age 62 instead of age 67 (the full retirement age for those born in 1960 or later) translates into a whopping 30 percent reduction in monthly benefits.