Baby Boomers Last of Social Security Winners : The Young Last in Line

Yikes - it seems the young will not only have to pay for everyone else's problems but also get less when it their time at the trough as their benefits will be reduced if nonexistent.

Baby Boomers Get the Most from Social Security
Source: Jeffrey Miller, "Why Boomers Get More From Social Security Than Anyone," MarketWatch, January 9, 2014.

January 15, 2014

By delaying their Social Security benefits, baby boomers can increase their payments, says Jeffrey Miller, a professor of economics emeritus at the University of Delaware.

• Workers born between 1943 and 1954 can receive full Social Security retirement benefits starting at age 66.
• But if workers wait to claim benefits at the age of 70, they receive an 8 percent increase in benefits per year.

Moreover, retirees today can use other tools that mitigate the cost of delaying those benefits:

• For married couples, a husband or wife can receive a spousal benefit while the other spouse is waiting to claim Delayed Retirement Benefits.
• This can be done using a restricted application or a "file and suspend" strategy.

Younger workers will not be able to realize as great a benefit as can baby boomers today. The retirement age will increase to 67 years old for workers born in 1960 or later, which will reduce the benefits that younger workers will receive, as those workers will only be able to use Delayed Retirement Benefits for three years rather than four.

Moreover, the benefits that younger workers receive will be smaller:

• If a worker born between 1943 and 1954 waits until age 70 to claim, he or she will receive benefits that are 32 percent higher than had the worker claimed at age 66.
• Once the full retirement age becomes 67 years old, the increase in benefits for waiting until age 70 will be 24 percent.
• One researcher, Alicia Munnell, determined that when the full retirement age moves from 66 years old to 67 years old, benefits at each claiming age will be reduced by about 7 percent on average.