Who Claimed Social Security Early Due To The Great Recession?
Between 2007 and 2009, the percent of 62 year olds claiming Social Security benefits reversed a decade-long decline and increased sharply before reverting back to trend. This phenomenon raises two ques-tions: 1) who was induced to claim early?; and 2) how much monthly retirement income have they lost as a result? To address these questions, this brief, which reflects findings from a recent paper, uses individual-level data from the Health and Retirement Study (HRS).
The discussion proceeds as follows. The first sec-tion presents trends in early Social Security claiming over the past two decades. The second section, focus-ing on the period before the economic crisis, explores whether the type of people who claim at age 62 tends to vary with economic conditions. The third section tests how sensitive the claiming decision was to the surge in unemployment during the Great Recession. The fourth section assesses how much money these early claimers lost.
The conclusion is that the Great Recession in-duced more than 5 percent of the eligible population to claim their benefits at age 62, and this impact was similar for individuals across the income spectrum. These early claimers ended up with monthly benefits that were 5 percent less than they would have had if their claiming plans had not been disrupted.