Posts Tagged "blue-collar"

Blue-Collar Workers Often Retire Early

Construction workers

Construction and factory workers, truck drivers, and cleaning crews don’t always have the flexibility to work a few extra years to beef up their monthly Social Security checks.

Several blog readers stressed this point in their comments on a recent blog article, “Changing Social Security: Who’s Affected.”

Lorraine Porto retired from a desk job, but her family is filled with craftsmen, carpenters, electricians, farmers, and truckers who worked “until they were worn out.”

People in white-collar jobs don’t always appreciate “just how tough and demanding it is” to climb poles every day, descend into manholes, build skyscrapers, or bring in the hay in 90-degree heat and sub-zero temperatures, Porto said.

Her comment was in response to the article, which described a study about a hypothetical increase in Social Security’s retirement ages. It found that if Congress were to increase the earliest possible age for starting Social Security from 62 currently to 64, blue-collar workers would have much more of an adjustment to make.

Blue-collar workers, Kenneth Wegner wrote, “are less physically able to remain in their jobs.”

Policymakers are well aware of this concern, and a proposal to increase the early retirement age isn’t currently on the table. Yet many people are deciding to postpone retirement on their own. The general trend in recent decades is for all workers – even some people in physically demanding jobs – to delay when they collect Social Security.

That wasn’t possible for Mark Roberts. The former electrician, who worked on construction sites in Austin, Texas, said he had to go on disability due to an old foot injury that got worse over time. Now 67, he said he wasn’t able to work long enough or earn enough to save for retirement and ekes out an existence on his Social Security checks.

“I have to survive for a month on what I used to make every week,” he said.

White-collar workers who lose their jobs can also find themselves in a similar predicament. …Learn More

Man building a house

Changing Social Security: Who’s Affected

Due to the strength and agility required for physical labor, half of blue-collar workers sign up for Social Security as soon as they’re eligible – at age 62.

But a large majority of white-collar workers wait so they can lock in a larger monthly check for retirement.

White-collar vs Blue-collar age 62In a new study, Lindsay Jacobs at the University of Wisconsin found that blue- and white-collar workers would also respond very differently to potential increases in the program’s two benchmark ages: the earliest eligibility age and the full retirement age.

Raising the earliest eligibility age to 64 would not change retirees’ lifetime benefits. But a two-year hike in the full retirement age would amount to a significant benefit cut – and with the depletion of Social Security’s trust fund projected for 2035, some version of this change might one day be considered.

The first change – raising Social Security’s earliest claiming age – would require a much bigger adjustment by blue-collar workers. Jacobs predicted that this group would respond by working an extra year, on average, compared with a few more months for white-collar workers.

Requiring workers to wait longer for their benefits does have a financial advantage: a larger Social Security check every month. The problem for some blue-collar workers is that they couldn’t make it to 64. One result, then, is that increasing the early retirement age would push up applications to Social Security’s disability program, according to the study funded by the Retirement and Disability Research Consortium.

Jacobs gauged the impact of raising the early retirement age based on how quickly workers’ declining health would affect their ability to work as they age. To understand how they would react to raising the full retirement age, she examined how workers’ decisions about retiring, saving, and signing up for Social Security would change under various policies. She classified the workers as blue- or white-collar using data that describes job tasks to show that the physical demands at work influence these decisions.

The second possible change would increase the full retirement age by two years, which amounts to an across-the-board cut in benefits regardless of when workers claim them. In response, white-collar workers, who are already more inclined to hold out until the full retirement age, would be more likely to work even longer to reach the new, higher benchmark age.

But blue-collar workers would bear the brunt of the benefit cuts, because their physically demanding jobs would often prevent them from working longer to offset the cuts. …
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