Jobless tap Social Security early
MIAMI — Paul Skidmore’s office is shuttered, his job gone, his 18-month job search fruitless, and his unemployment benefits exhausted. So at 63, he plans to file this week for Social Security benefits, three years earlier than planned.
“All I want to do is work,’’ said Skidmore, of Finksburg, Md., who was an insurance claims adjuster for 37 years before his company downsized and closed his office last year. “And nobody will hire me.’’
It is one of the most striking fallouts from the bad economy: Social Security is facing a rare shortfall this year as a wave of people like Skidmore opt to collect payments before their full retirement age. Adding to the strain on the trust are reduced tax collections sapped by the country’s historic unemployment — still at 9.5 percent.
More people filed for Social Security in 2009 — 2.74 million — than any year in history, and there was a marked increase in the number receiving reduced benefits because they filed ahead of their full retirement age, which rose last year from 65 to 66.
Nearly 72 percent of men who filed opted for early benefits in 2009, up from 58 percent the previous year. More women also filed — 74.7 percent in 2009 compared with 64.2 percent the previous year.
Jason Fichtner, an associate commissioner at the Social Security Administration, said the weak economy has led more people who lost their jobs to retire early. It also has forced some people hard-hit by the recession and in need of a bigger paycheck to push back retirement and stay in the workforce longer.
“But we’re seeing more people taking early benefits than staying in the workforce longer,’’ Fichtner said.
Like Skidmore, 63-year-old Jan Gissel of Tustin, Calif., was forced into retirement early. She turned to unemployment benefits when her technical support business failed, and filed for Social Security in September. Together, the checks are keeping her afloat.
“I knew I had to have an income from somewhere, and my business wasn’t giving it to me,’’ she said.
Gissel wants to continue working but still has not found a job. Although she did not expect to be cashing Social Security checks so soon, she is grateful for the support they have provided.
In the annual report of the Social Security program released Thursday, the trustees said pension and disability payments will exceed revenues for this year and 2011, reflecting a deep recession.
The report forecast that the program would return to the black for 2012-14, but that benefit payments will again exceed tax collections in 2015. For every year after 2015, the report projects that Social Security will be paying out more than it receives in tax collections as 78 million baby boomers begin retiring.
The trustees did not focus on the increase in early retirees in their report because they do not expect the early retirees to significantly drain funds over the long term. Early opt-ins receive smaller monthly checks so that they are not projected to receive any more money over a lifetime than they would if they had waited until their full retirement age to collect Social Security.