New Retirement Plan: Double Dipping into Social Security and Unemployment

Now there’s a new way to fund your retirement: collect unemployment benefits and Social Security at the same time.

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Now there’s a new way to fund your retirement: collect unemployment benefits and Social Security at the same time.

Never mind that it flies in the face of logic to be both unemployed and retired. You’re one or the other. Yet a growing number of folks who are past age 62 and out of work are double dipping. It’s yet another government budget absurdity.

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Collecting two income streams from the government appears to be perfectly legal. But if you pull it off I wouldn’t shout too loudly about it. One reason double dipping is possible is that officials have trouble cross checking who’s collecting what from which government entity. In some cases, anyway, if they knew they would stop it.

The rise of double dipping has much to do with the sour economy. As laid-off retirement-aged workers fear they will never land a job, they simply decide to retire and trigger Social Security benefits. But they keep collecting unemployment benefits too, for up to 99 weeks.

This is not fraud – like when you have a job but keep collecting unemployment benefits. Indeed, with the number of long-term unemployed setting records and older workers needing to stay at work longer the line between unemployment and retirement is blurring anyway, notes The Fiscal Times. Just under a million private sector folks in the U.S. probably qualify to collect both. Several hundred thousand state employees who may have retired, began collecting a pension, then went back to work and got laid off may also be free to double dip.

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“This isn’t fraud, but they’re costly loopholes,” Steven Malanga, a senior fellow at the Manhattan Institute, told the Fiscal Times. “This illustrates how poorly we’ve designed some of our government worker retirement programs.”

Poorly designed, yes. But there’s an upside to retirement-aged folks double dipping. Many really do want to stay in the labor force because they need income or want to stay productive. We’re all better off if these folks eventually find work, and collecting unemployment benefits usually means they are still looking.