Monday, April 8, 2013

Why do so many people start to collect Social Security benefits in January and so few in December? Nice graphs showing monthly data that prompt such fascinating questions!!

I was looking at Social Security benefit data and noticed a couple of things.  Below you will see the monthly (starting in 1995) Social Security benefit awards to both retired workers and their spouses. The long term trend line is in RED.

First observation:  Notice the tall shoots that tower above the trend line at predictable intervals?  EVERY ONE of those shoots marks January of the particular year.  Notice the shoots that go BELOW the trend line?  With a couple of exceptions, those are all Decembers.

I did a Google search and could not find a suitable answer as to why January is far and above the preferable month for people to claim benefits en mass.  Can anyone help me out?

Source: Created by Cara Hayward
Second observation:  the shoots above the trend line got larger in magnitude as time passed, and the shoots below, with the exception of the mid-2000's, got smaller in magnitude especially in the last couple of years.

Keep in mind, while the graph measures benefit awards in a given month, the totals will be cumulative of ALL those points.

Using the same graph above, I inserted lines to eye-ball averages that represent time spans and benefit award levels. Eerie, isn't it?  Nice stair step and duration almost predictable.

Hmm...Predictable.  Do you hear that politicians and policy-makers?  Why were we not ready for this?  Rhetorical question, I suppose...
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