The US Social Security system could be collapsing due to the increase in the number of people belonging to the baby boomers generation, who are leading an increase in applications for early retirement. Inflation and the new Social Security Fairness Act are encouraging citizens to apply for this status before reaching retirement age. Once the contribution requirements have been reached , people no longer wait to enjoy their retirement and monthly Social Security payments. These Social Security benefits are causing a collapse in the US Social Security Administration, which is unable to absorb this demand while facing office closures and layoffs.
The Social Security System is collapsing
More than 4 million online forms have been received by the US Social Security offices. This is 15% more than last year. Why is this happening? Well, US citizens are making the decision to apply for early retirement, via online. As a result, Social Security is facing a surge of applications that could collapse and slow down the system.
Early retirement
Why are citizens retiring before they reach the established age for contributions? The economic and social situation in the United States (and globally) is extremely delicate. The new term of Republican President Trump has brought with it an implementation of measures and a social and inter-country imbalance that worries American citizens.
One of the reasons is inflation, which has made life more expensive in general; food, supplies and housing prices among others. On the other hand, new measures have been introduced in the social security system which are favoring this movement. One of them informed the spouses of beneficiaries when they would be able to receive payment for a larger payout according to their own working life. This measure in particular resulted in the receipt of 50,000 applications.
The application of the Social Security Fairness Act has also influenced this increase. As a result of this new measure imposed by the Social Security system, workers whose jobs were not covered by the program and who receive external pensions, will be eligible for an increase in their monthly allowance. Although inflation and the high increase in the price of life are reasons why people are opting for early retirement, they also have a “positive” effect. For the first time in US history, the average monthly payout exceeds $2,000. Inevitably, it is an attraction that few citizens can resist.
What about retirement age?
The retirement age came into effect in the United States in 1935, with the creation of the Social Security. Since then, the default retirement age has been changing. Why? The need for the State to collect more taxes in order to meet these monthly payments. The retirement age started at 62, but is now 67. In the USA there are three types of retirement:
- Early retirement: at 62.
- Average retirement age: 67..
- Late retirement: at age 70.
The increase is occurring in early retirement, although average and late applications also add up. We cannot forget that the Baby Boom generation is made up of some 76 million people who have already fulfilled their job and want to retire, taking advantage of the benefits that Social Security offers them at this moment.
Social Security needs help
The possible collapse that the Social Security is facing is not the only problem it has to manage. By order of the Department of Government Efficiency, created by Donald Trump and Elon Musk (who no longer has his position as a counselor), the closure of offices of the Social Security and therefore, numerous dismissals of qualified staff are being carried out. Perhaps they should have coordinated the imposition of further measures to improve retirement conditions and the simultaneous closure of offices?
