Retirement Security ― Challenges for Those Claiming Social Security Benefits Early and New Health Coverage Options

Deciding when to retire and claim Social Security benefits can be one of the most important financial decisions older Americans make. Despite higher monthly benefits for those who delay, many people still claim Social Security retirement benefits at age 62, the earliest age of eligibility. In 2014, these early claimers will see their monthly benefits reduced by 25 percent compared to what they would have received if they had delayed claiming until age 66, the current full retirement age. At the same time, some early claimers do not have access to government or employer-sponsored health insurance. These early claimers may have been able to purchase coverage on the individual market, but they may have also been subject to denials and rate increases because of their health status. To better understand the circumstances faced by those who claim early Social Security benefits, GAO examined: (1) demographic and occupational characteristics associated with early claiming; (2) retirement income of early claimers compared to those who delay; and (3) how PPACA changes health coverage options for early claimers. More specifically, GAO examined the characteristics and income of early claimers using data from the Health and Retirement Study, as well as the eligibility for PPACA insurance programs using 2009-2011 American Community Survey data.