Many draw early on Social Security

Unemployed seniors have limited options

PALM SPRINGS, Calif. — This retirement oasis in the desert has long beckoned those who want to spend their golden years playing golf and sitting by the pool in the arid sunshine.

But for Clare Keany, who turned 62 last fall and cannot find work, it feels more like a prison. Just a few miles from the gated estates of corporate chieftains and Hollywood stars, Keany lives in a tiny mobile home, barely getting by on little more than $1,082 a month from Social Security.

“I would rather be functioning and having a job somewhere,” said Keany. “I really don’t enjoy living like this. I’ve got too much to do still.”

Even as most Americans are delaying retirement to bolster their savings accounts, the recession and its protracted aftermath have forced many older people who are out of work to draw Social Security much earlier than they had planned.

According to an analysis by Steve Goss, chief actuary for the Social Security Administration, about 200,000 more people filed initial claims in 2009 and 2010 than the agency had predicted before the recession and he said the trend most likely continued in 2011 and 2012, though that is harder to quantify. The most likely reason is joblessness.

Drawing Social Security early has repercussions. By collecting four years shy of her full retirement age, Keany will receive a reduced monthly benefit for the rest of her life. Those who collect early get 20 to 30 percent less a month than they would get if they waited until full retirement age, which varies by year of birth. People in Keany’s age bracket are expected to live an average of close to 23 more years.

“The most potent lever that individuals can pull in trying to get themselves a secure retirement income is to postpone claiming” Social Security, said Alicia Munnell, director of the Center for Retirement Research at Boston College.

As recently as a decade ago, half of those eligible claimed Social Security at 62. But that share has been falling because people are living longer and still want to work as well as shore up retirement funds.

That makes it even more galling for those who are forced to claim early because of unemployment.