President Joe Biden has a long and storied history of attacking Social Security. His political posturing over how to solve its structural shortfalls will have harmful consequences. Specifically, uncertainty over Social Security’s future could be exacerbating labor market shortages — one of the prime drivers of rising prices.
The Wall Street Journal recently ran a story about workers approaching retirement age who are claiming Social Security “out of fear their benefits will be cut once the program runs short on cash.” It interviewed one New Jersey-based individual who stated that the uproar over Social Security at last month’s State of the Union address prompted him to accelerate his plans to retire at age 62, the earliest he can claim benefits.
The types of anecdotes the Journal examined have hard data to back them up. A 2021 study by Boston College’s Center for Retirement Research found that negative press references to Social Security’s finances increase Americans’ eagerness to claim benefits earlier. Specifically, headlines surrounding the program’s insolvency prompted survey respondents to state they would retire one year earlier, on average. That finding was consistent with prior studies showing “that workers adjust their labor supply and private saving in response to policy uncertainty around future Social Security benefits,” according to the study.
Claiming Social Security benefits early brings with it consequences on multiple levels. Particularly for individuals in good health and/or with other financial resources in their early 60s, claiming benefits early — which reduces the benefits paid monthly for the rest of
