With life expectancy growing, many consumers are working past the standard retirement age of 65. Because of that, workers are waiting to cash in their Social Security benefits. A recent study conducted by the Center for Retirement Research at Boston College said that many seniors are not claiming Social Security till they reach the age of 70.
The study, titled "Social Security's Real Retirement Age is 70," says that a number of factors play into the decision to hold off on Social Security. The study said that age longevity and the rate of benefits contribute to consumers working longer and not using Social Security as a means of income.
Age longevity is a key reason why benefits are not being claimed. The U.S. Census Bureau reported that in 2012, 30 percent of 70-year-old men were still working. Workers can claim Social Security benefits at any point between 62 and 70, but with so many still working, they abstain from going this route. Author of the study Alicia Munnell said the cost of benefits are also playing into this new trend.
"The simple fact is that monthly benefits are highest at age 70 and are reduced actuarially for each year they are claimed before age 70," she said. "This is a relatively new development, which may explain why Social Security's retirement age is the best-kept secret in town. But I think it's time we told folks."
The study said that the rate – benefits as a percentage of income before retirement – for those who claim at 70 is 50 percent.
Munnell went on to say that educating consumers about rates will help them decide if cashing in Social Security benefits at 70 is a good idea.
