Tuesday, September 29, 2009
Job losses, early retirements hurt Social Security
by Steven Olemacher
posted by Jameel Murray
WASHINGTON — Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years, the first time that's happened since the 1980s.
The deficits — $10 billion in 2010 and $9 billion in 2011 — won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. But they will add to the overall federal deficit.
Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn't expect the increase to be so large.
What happened? The recession hit and many older workers suddenly found themselves laid off with no place to turn but Social Security.
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One solution would be to have these people work for a little longer; however, this would create bottleneck in the employment of college graduates. - Alma Zhumagulova
ReplyDeleteYea i also think that people should start their savings a bit earlier.
ReplyDeleteJameel
It is a truth that people not only need to start their saving early, but also learn the benefit of early saving.
ReplyDeleteShawn Gao