Social Security is facing its first ever shortfall as more and more people opt to collect payments before reaching full retirement age. More people filed for social security in 2009 (2.74 million) than in any other year in history.
Poor health is usually the reason people take early retirement. However, with the terrible economy and high unemployment rate, many older Americans who would like to continue working are taking early retirement because they have lost their jobs, cannot find other work, and their unemployment benefits have run out. About 72% of men who filed for social security opted for early benefits in 2009, up from 58% the previous year. 75% of women filed for early benefits in 2009 compared with 64% in 2008. The opposite effect is also happening. Many people who planned on retiring are staying in the workforce longer trying to recoup lost retirement and personal savings.
The primary concern of early retirement is smaller retirement checks. People entitled to full benefits at age 66 (used to be age 65) would only receive 75% of their checks if they retire at age 62. Conversely, if you wait until age 70, you would get 32% more. You would receive these decreased or increased benefits for the rest of your life.
Although social security is the largest source of income for many elderly Americans, it was never intended to be the only source of income. You need other income sources such as investments, savings, and retirement accounts.
The official website of the U.S. Social Security Administration is www.socialsecurity.gov and it provides very good information.