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Understanding Social Security Trends and Perspectives

Social Security is designed to serve as a safety net for people and their families to protect them from loss of earnings due to retirement, disability, or death. Largely funded by payroll taxes, the program protects against inflation and ensures that those on the lower end of the income scale see the largest income replacements in retirement.

When signed into law in 1935, Social Security policy makers understood that with changing demographic and economic conditions, Social Security would require updates from time to time to maintain its long-term financial health and meet its vital social insurance role. Social Security initially covered only retired workers. In 1939, however, Social Security added a family benefit by expanding to include the spouses and minor children of retired and deceased workers. In 1956, Social Security further expanded to include benefits for disabled workers. Society is different today than it was when the last major updates to Social Security took place in 1983.

Two men and two women of various ages having a business meeting discussing Social Security trends

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Who Claims Social Security Early - and Why?

The portion of people claiming Social Security retirement benefits at age 62 has declined, from over half of the eligible population in the 1990s to less than a third in the 2010s. Over time, the context for claiming Social Security has also changed, and the cohorts of retirees have changed, too. A recent report examines this context and the characteristics of those who decide to start claiming their benefit at the earliest eligibility age of 62 compared with those who wait. 

Additionally, a companion report asks what financial impacts the decision to collect early might have for the individual over time. Combined, the two reports’ findings suggest that employment losses resulting from the COVID-19 recession may lead to more people claiming earlier, potentially affecting large numbers of older adults’ financial security in the coming decades.

Read the report.

AARP Social Security Thought Leadership

The AARP Public Policy Institute examines demographic and economic trends that affect the solvency of the Social Security program and the adequacy of benefits. Millions of Americans rely on this vital program for their financial well-being today, and millions more will rely on it in the years ahead.

Visit our blog to learn more about the future of Social Security from our experts.

Earnings inequality accounts for a considerable portion of Social Security’s fiscal challenges. If 90 percent of earnings had been subject to Social Security payroll taxes since 1983:

  1. the system’s long-term financing gap would be 25 percent lower today and,
  2. the life of the combined trust funds would last an additional four years above current Social Security projections.

Learn more in our latest report, How Does Earnings Inequality Affect Social Security Financing?

Social Security Today and in the Future: A Chartbook

Three business people discuss a Social Security graph in a meeting room

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The demographics of America have changed substantially in the more than 80 years since Social Security began. In Social Security Today and in the Future: A Chartbook, AARP examines how factors such as increased longevity, declining birth rates, and changes in the makeup and participation in the labor force impact the program, its financing, and the financial security of Americans retiring today and in the future.

Check back soon for the upcoming digital version of this chartbook.