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National unemployment is more than 8 percent and 10.7 percent in California. In these conditions many baby boomers, especially those whose unemployment benefits have run out, have opted to take Social Security at age 62. They may find themselves facing federally enforced poverty.
The Social Security monthly payout at 62 is substantially less than the payout at full retirement age of 66. Someone with a monthly payout of $1700 would be hard pressed to pay a mortgage of $1200 plus other necessities. Retirees not yet 65 also have to pay their own health insurance. If they are fortunate enough to find a policy for $500 a month, that would consume the full Social Security payout. But as FDR said, people don’t eat in the long term.
Retirees at 62 can still work but Social Security imposes an income limit of $14,640. If retirees exceed that amount, the government reduces their benefits $1 for every $2 they earn. At full retirement age, the limit rises to $38,800 and the government deducts $1 for every $3 earned. After full retirement age the income limit disappears, but that does not help those who take Social Security at 62 and are trying to survive. Those with the Federal Employees Retirement System get a much better deal.
FERS allows retirement at age 55, seven years earlier than Social Security. And FERS offers some early retirees a Special Retirement Supplement (SRS) “designed to help bridge the money gap,” and which kicks in “your missing Social Security income until you reach age 62.” Apart from SRS, if official websites are any indication, early FERS and Civil Service Retirement System (CSRS) retirees are not subject to the kind of income restrictions of those on Social Security alone. That is also true of those on state government retirement systems who can retire and resume work at their same state job as a consultant with no penalty whatsoever.
Those who take Social Security at 62 face enough hardship without an income limit that serves no purpose. As a matter of justice and equal treatment under law those limits should be eliminated, and this not a zero-sum game. On the contrary, everybody wins. Retirees can pay bills and generate economic activity. Government gets more revenue. Federal employees have a simpler job. Someone might ask the presidential candidates what they think of it.