Rising Social Security usage could create problems later

Increases in retirement, disability collections could drain system.

Earlier this year, Social Security trustees predicted the entitlement program would pay more in benefits than it takes in from taxes in 2016, and the trust fund that pays for the program would run out of money in 2037.

Rising claims from disabled workers and those forced into early retirement due to high unemployment could accelerate the timetable, some experts say.

“The amount you receive in benefits over a lifetime doesn’t vary much, even if you start collecting early,” said Richard Johnson, a senior fellow with the Urban Institute, a Washington-based research organization. “The problem is that if you’re collecting benefits and not working, you’re not paying taxes into the system. And that does tend to hurt Social Security’s finances.”

In 2009, the most recent year for which numbers were available, 185,385 Miami Valley residents collected Social Security benefits, up from 183,385 in 2008 and 179,025 in 2007, according to numbers from the Social Security Administration.

“We’ve definitely seen an increase in both retirement and disability applications as a result of the recession,” said Theresa Busher, a local spokeswoman for the agency.

It’s difficult to measure exactly how much of the increased participation in Social Security is due to the recession, but government forecasts for the nation give some clues.

The Social Security Administration had projected a year-over-year increase of 315,000 benefits applications for its 2010 fiscal year, which ended Sept. 30. But applications actually climbed by 465,000 to 2.57 million people, or 150,000 above expectations.

“People have always used early Social Security benefits as a safety net during recessions,” Johnson said. “We’ve seen that in past recessions, and it looks like we’re seeing it again.”

Contact this reporter at (937) 225-2437 or rtucker@Dayton DailyNews.com.

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