Social Security strained by early retirements - WKOW 27: Madison, WI Breaking News, Weather and Sports

Social Security strained by early retirements


WASHINGTON, D.C. (WKOW) -- Big job losses and a spike in early retirement claims from laid-off seniors will force Social Security to pay out more in benefits than it collects in taxes the next two years.

That's the first time it's happened since the 1980s. The deficits, $10 billion in 2010 and $9 billion in 2011, won't affect payments to retirees because Social Security has accumulated surpluses from previous years totaling $2.5 trillion. However, they will add to the overall federal deficit.

Applications for retirement benefits are 23 percent higher than last year, while disability claims have risen by about 20 percent. Social Security officials had expected applications to increase from the growing number of baby boomers reaching retirement, but they didn't expect the increase to be so large.

Nearly 2.2 million people applied for Social Security retirement benefits from start of the budget year in October through July, compared with just under 1.8 million in the same period last year.

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