Social Security Trend: Stimulus Money Allowed Seniors To Retire Early and Receive Full Benefits

Shot of a happy mature couple spending a relaxing day at home.
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The golden years are looking especially golden for certain Americans who have the financial wherewithal (and desire) to retire early while also delaying when they get their Social Security benefits — something that’s happening more frequently these days, thanks to the pandemic-era combination of stimulus payments, soaring home values and stock-market gains.

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A new analysis of government data conducted by the Washington Post found that the COVID-19 economy has created “some of the strongest incentives to retire in modern history.” At the same time, many of those who are retiring are also waiting to claim their Social Security benefits to ensure bigger monthly checks.

A WaPo analysis of U.S. Bureau of Labor Statistics data found that the number of workers who applied for Social Security benefits in the 12 months ending in September declined 5% from the same period the prior year. That was the biggest drop in nearly two decades, according to the Social Security Administration.

Over that same period, the number of retirements among workers ages 65 to 69 climbed 5% year-over-year. The number of retirees in the United States rose by roughly 3 million during the pandemic, which is about twice as much as would have been expected before the pandemic.

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Many experts say the trend has been driven by three separate forces: generous federal stimulus and unemployment insurance payments; bigger retirement funds thanks to stock market gains and soaring home values; and COVID-related restrictions that have forced seniors to apply for Social Security benefits online rather than in field offices.

“Usually in economic downturns, we see increased reliance on Social Security programs, and thought that’s what was going to be coming with the pandemic,” Lauren Hersch Nicholas, an economist at the University of Colorado at Denver, told the Washington Post. “The claiming numbers just don’t show that at all.”

Another factor driving retirements higher, especially among women, is the nature of the COVID-19 pandemic itself, which has contributed to both economic and health uncertainty.

“Health concerns are unique to this recession and may be playing a role, especially because workers ages 65 and above are less likely to be able to telework than younger workers,” Courtney Coile, an economist at Wellesley College, told the WaPo.

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Retiring early might be an option for Americans with healthy bank accounts, but it’s not so easy for those who are still having a hard time making ends meet. As GOBankingRates previously reported, only 36% of non-retired Americans believe their retirement savings are on track to meet their post-retirement financial needs, and about one-third who had planned to retire say it will now happen later because of the pandemic.

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About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
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