For better-off Americans, the pandemic economy created some of the strongest incentives to retire in modern history, with generous federal stimulus, incredible market gains, skyrocketing home values and health concerns drawing many Americans into early retirement.

The surprising twist? Many of these retirees also opted to put off claiming Social Security benefits, an exclusive Washington Post analysis shows. By delaying their benefits, these retirees can expect to collect higher monthly checks in the future.

The number of workers applying for Social Security benefits in the 12 months ending in September fell 5 percent from the same period a year earlier, the biggest drop in almost two decades, according to the Social Security Administration.

During the same period, retirements among workers ages 65 to 69 were up 5 percent, according to a Washington Post analysis of Bureau of Labor Statistics data. (It’s not clear how many of those who retired early delayed Social Security benefits, as BLS doesn’t track such benefits in its monthly surveys.)

America’s retiree population grew by about 3 million during the pandemic, about double what would have been expected given pre-pandemic trends, which has been previously reported. But the surprising surge in older Americans delaying Social Security upon retirement is another example of a number of unusual trends roiling the American labor market. Most notably, workers of all ages are quitting jobs in record numbers, in what has been dubbed the “Great Resignation.”

Economists, researchers and government officials attribute the trend to generous federal stimulus and unemployment insurance payments that enabled retirees to make ends meet in the short term; soaring stock and home prices that fattened retirement accounts; and pandemic-related restrictions at Social Security field offices nationwide that forced seniors to apply online.

“Usually in economic downturns, we see increased reliance on Social Security programs, and thought that’s what was going to be coming with the pandemic,” said Lauren Hersch Nicholas, an economist at the University of Colorado at Denver who has studied the phenomenon. “The claiming numbers just don’t show that at all.”

Social Security allows most people to enroll as early as age 62, but steadily increases monthly payments to those who enroll later, up to age 70. Someone who turned 65 this year and last earned $60,000 could see their monthly payment jump from $1,418 to $1,550, a 9 percent increase, by delaying their retirement by a year, according to Social Security’s calculations.

Over 7 million Americans lost their jobless benefits in September. The Post’s Yeganeh Torbati explains what that means for families and the economy. (Mahlia Posey/The Washington Post)

Economist Courtney Coile of Wellesley College said the unusual rise in retirements, especially among women, was probably driven by the unprecedented nature of this crisis.

“Health concerns are unique to this recession and may be playing a role, especially because workers ages 65 and above are less likely to be able to telework than younger workers,” Coile said.

The coronavirus pandemic has made workplaces far more dangerous for those who are older or in vulnerable health, prompting an unusual wave of retirements among a population that has accrued a bit of a nest egg.

Fawn Michel, a certified public accountant living in Port Orchard, Wash., retired in May at 62 but doesn’t plan to take Social Security until she turns 70.

Early this year, she and her husband analyzed their fast-growing portfolio and realized she didn’t have to keep working. As long as they kept their expenses near their pandemic lows, she could afford to retire without taking Social Security early. As her firm returned to the office, she wouldn’t have to drive two-plus hours to work in a Seattle suburb each day, then drive two-plus hours back each night.

“I just decided I’d had enough, you know?” Michel said, adding that the pandemic had really changed her thinking on retirement. “When you have friends and family dying from something like this, I’m thinking, ‘Well, you do this now, or maybe it’s never going to happen.’”

Experts have not yet settled on one easy explanation for why people are retiring early and delaying Social Security, although they are zeroing in on possible causes.

Some retirement experts, including those at the Social Security Administration, point to the three federal stimulus payments and expanded unemployment insurance during the pandemic, which have allowed some seniors to make ends meet without taking Social Security, even if they had been struggling financially.

“Extended unemployment payments and pandemic relief payments have contributed to lower benefit applications,” the Social Security Administration’s Office of the Chief Actuary said as part of a longer statement to The Post.

For example, Marilyn, who spoke about her employment situation on the condition that her last name be withheld, said she had never expected to be able to quit her job at age 65. But during the pandemic, she paid off her car with stimulus checks and watched her nest egg grow as her expenses plummeted. She no longer had to commute, eat out or buy work clothes. She saved even more by growing her own corn, tomatoes, cabbage and kale in her backyard garden in Laurel, Md.

In the coming years, she hopes to work part-time and travel. “I consider myself really fortunate, I really do,” said Marilyn, one of many people who reached out to Post columnist Karla Miller after her columns on the Great Resignation.

Nicholas, the Colorado economist, agreed, saying that extra government benefits may have provided older Americans with a cushion to delay taking Social Security in a time of extreme uncertainty and volatile markets.

“It may be that all of the stimulus benefits were effective in keeping them from full-on deciding to claim benefits in the short term,” Nicholas said. “There’s a lot of wait and see.”

In a recent working paper circulated by the National Bureau of Economic Research, Nicholas and three collaborators found no relationship between the number of Social Security retirements in an area and higher levels of pandemic shutdowns or higher levels of in-person work. The team speculates that national factors such as federal stimulus payments and reductions in service at local Social Security offices could have played a role.

In a separate and ongoing research effort, Wellesley’s Coile and Massachusetts Institute of Technology graduate student Haiyi Zhang set out to understand how the pandemic changed retirement, and found themselves looking to explain an early retirement wave. They found that workers were less likely to retire if they could work from home. However, they didn’t see evidence that local coronavirus outbreaks nor the local job market had an effect on early retirements.

Economists also agreed that it wasn’t likely that covid-19 deaths played a direct role in the drop in Social Security applications, even though about 166,000 of the 737,000 Americans who have died of covid-19 were between the ages of 65 and 75, according to the Centers for Disease Control and Prevention. Nicholas noted that covid-19 tended to be most fatal to those who were otherwise ill or in nursing homes — groups that were already likely to be retired and collecting Social Security.

Many early retirees told The Post they were surprised this year to see how much soaring stock and home prices had improved their financial situation.

Since the pandemic began, the S&P 500 has offered returns as high as 40 percent, depending on the dates used and whether dividends were reinvested. Investors who entered the pandemic with a nest egg of about $700,000 could have become millionaires — and that’s without considering household equity in real estate. Home values also jumped more than 20 percent over that same time period, according to Zillow. Markets such as Austin; Boise, Idaho; and Kalispell, Mont., saw gains north of 50 percent.

More than half of Americans (54.5 percent) ages 55 to 64 have retirement accounts and three-quarters (74.1 percent) own their home as of 2019, the most recent date for which Federal Reserve data is available.

At age 62, Cheryl Miller now plans to retire from her job in academic medicine in a matter of months, even though she won’t collect Social Security for four more years. She is burned out at work and confident she’ll be content with a modest lifestyle in her home in Hillsborough, N.C., a small town in the forested hills a dozen miles northwest of Durham.

She sat down recently with her financial adviser to run the numbers. Her portfolio was thriving, her older-model car was paid off and the mortgage on her fast-appreciating home was affordable. If she kept her expenses low and got insurance from a public health-care exchange, she could leave her job and still make ends meet until she’d be eligible to collect full Social Security at age 66 and 10 months. (For those born after 1959, full retirement age is 67; those born earlier can collect a few months earlier.)

“It’s a short-term frugality strategy,” said Miller, who is now delaying foreign travel, including a safari trip to Africa. “I will take more road trips. The trip to Australia is going to be delayed. The money saved by not doing a lot of traveling over the past year or two helps a lot.”

While it did not come up in The Post’s interviews with retirees, Nicholas suggested that some may have put off filing for benefits because their local Social Security office restricted in-person activities to slow the spread of the coronavirus.

In addition to online and phone services, the Social Security Administration operates more than 1,200 field offices, where Americans can apply for benefits, get new Social Security cards or enroll in other programs. During the pandemic, those offices have been limited in their operations, with in-person appointments restricted to critical situations.

The Social Security Administration’s Office of the Chief Actuary noted that field office closures “may not be a major factor” in holding back applications because “online filing of the application is widely used by retirees.”

For some retirees, however, delaying social security may not make financial sense. Nancy Westbrook, a Vermont financial adviser with One Day In July, said clients often focus on maximizing their monthly social security check and forget to consider how to maximize their lifetime returns.

“Obviously there were some unexpected income sources that were not predicted pre-pandemic that have helped people justify delaying that benefit. But that is temporary and should be considered separately,” Westbrook said. “You really need to look at the Social Security benefit and evaluate what you are giving up, including the ability to invest the excess savings, by waiting.”

Regardless of what is driving the trend, the delayed Social Security wave signals an improving retirement situation for many Americans — especially in the wake of a record-shattering economic crisis.

“This is a much better set of outcomes among older workers than we were expecting when the pandemic was starting,” Nicholas said.

Columnist Karla L. Miller contributed to this report.