Go West, Early SS Claimant!

On Wednesday morning, January 2, 2008, National Public Radio broadcast two stories on Morning Edition about the "Baby Boomer" generation -- one about its impact on the Social Security system, and another about Boomers' new settlement patterns in retirement.

In "Baby Boomers Begin to Claim Social Security" by John Ydstie, the effects upon the Social Security system arising from the first "Baby Boomer" claimants, at the early age of 62 (with many more claimants to follow), are considered.

For decades politicians, pundits and scholars have been warning about the looming retirement of America's baby boom generation and its impact on Social Security.

Well, the baby boom's retirement is not just looming anymore .... It's here.

This year, the first of the baby boomers will turn 62 years old and become eligible to claim Social Security retirement benefits.

The Social Security Administration projects that about a million of those first baby boomers, people born in 1946, will take the early retirement option even though their monthly checks will be 25 percent lower than if they waited until they are 66, the normal retirement age.

In all, there are nearly 80 million baby boomers, Americans born between 1946 and 1964. They've had a big impact on American culture and they'll have a big impact on Social Security's finances. * * *

In the story, a woman from Mechanicsburg, Cumberland County, Pennsylvania, was interviewed as an example of a worker (a teacher), who opted for early, reduced, Social Security benefits.

As to where such retiring "boomers" might choose to live, the story "Baby Boomers Pick Mountains Over Beaches" reports a change in the settings favored.

While the future of Social Security may be uncertain, some who are retiring now are forgoing Southern beaches in favor of Western mountains.

Reports in recent days have noted a new trend in baby boomer retirement: They're choosing to settle in the West.

Still working, and expect to work still longer? Don't feel bad. Those early claimants & premature retirees may be more the exception than the norm, according to NPR's prior story "Baby Boomers Likely to Retire Later" (11/14/07).

Almost 80 million baby boomers will be eligible to receive Social Security benefits in the next 20 years, setting off fears that the Social Security system will be overwhelmed.

But baby boomers are expected to bring a different approach to old age by working longer than prior generations.

You can listen to these stories, as broadcast, by clicking the "Listen" button on the individual web pages.

For the official word, from the Congressional Budget Office, about the future of Social Security, see: "The Outlook for Social Security" (June, 2004).

In its "Summary of the 2007 Annual Reports", issued by the Social Security and Medicare Boards of Trustees, the need for corrections in the system are highlighted, and possible "fixes" to the Social Security system are noted:

Social Security could be brought into actuarial balance over the next 75 years in various ways, including an immediate increase of 16 percent in payroll tax revenues or an immediate reduction in benefits of 13 percent or some combination of the two.

Ensuring that the system is solvent on a sustainable basis beyond the next 75 years would require larger changes.

To the extent that changes are delayed or phased in gradually, larger adjustments in scheduled benefits and revenues would be required that would be spread over fewer generations. * * *

The financial difficulties facing Social Security and Medicare pose enormous, but not insurmountable, challenges. The sooner these challenges are addressed, the more varied and less disruptive their solutions can be.

We urge the public to engage in informed discussion and policymakers to think creatively about the changing needs and preferences of working and retired Americans.

Such a national conversation and timely political action are essential to ensure that Social Security and Medicare continue to play a critical role in the lives of all Americans.

Update: 01/07/08:

The Wall Street Journal published an article on January 6, 2007, entitled "The Market Braces for the Boomers", by Alan Murray, that considers other possible economic ramifications of the "Boomer" generation.

Will the baby boomers' retirement cause the stock market to go bust? That question, studied and debated for more than a decade, is no longer hypothetical. Kathleen Casey-Kirschling, the former New Jersey teacher who was born one second after midnight on January 1, 1946, became eligible for Social Security benefits this New Year's day, making her the first splash of a demographic tsunami. Over the next three decades, nearly 80 million boomers will join her. * * *

The generation that was first raised by Dr. Spock, first mesmerized by television and first serenaded by the Beatles is about to redefine retirement, just as it has every other stage of American life. * * *

Still, while demography may be destiny, that destiny is not unalterable. There are several economic developments that could lessen the burden of the boomers' sunset years. * * *

This Wall Street Journal article apparently provided a link to this Blog's posting, since several WSJ readers logged onto this site from it.